Ferrari outperforms EV makers like Tesla

The Ferrari SP38 as seen at the Goodwood Festival of Speed ​​2022 in Chichester, UK on June 23rd.

Martin Lucy | Getty Images

It wasn’t a question of which automaker’s stock performed best this year. It was about which stocks managed to escape the worst selling pressure of the year.

rear Strong growth in auto stocks 2021 has been a difficult year with the bursting of the EV startup bubble, declining vehicle inventories and rising interest rates.In addition to the fear of recession And overall “demand destruction” For industry sales.

Many of the world’s largest automakers Good performance this year But it wasn’t enough to offset external economic concerns that the most profitable days were past.

Morgan Stanley analyst Adam Jonas wrote in an investor note that “FY2023 will be a difficult year due to weaker demand (higher interest rates), deflation (lower price/product mix) and unfavorable shifts in the EV supply/demand balance. We are ready for the outlook,” he said. Early this month.

The FactSet Automotive Index, which includes automakers and aftermarket parts, is down about 38% so far this year as of Tuesday’s close. All major automakers and EV startups experienced double-digit declines this year, partially or fully offsetting 2021 increases.

Many once-promising EV startups have been among the biggest losers. Some companies ran into capital problems or were unable to expand production as expected. Rivian, Clarity, canoe When Nicola It’s down more than 76% year-to-date.

Traditional automakers have managed to contain the decline in stock prices better than EV start-ups. But America’s largest automaker – general motors When ford motor – Both experienced declines of more than 40%, with no surprise rises at the end of the year. Stellantis, Nissan, Toyota When Volkswagen More than 25% decrease.

Ferrari wins with minimal losses

The lowest rate of decline was Ferrariwhich is down about 18% year-to-date, making it the best-performing automaker stock of the year.

What drives that performance? First of all, the storied manufacturer of luxury sports cars is unlike any other automaker.It is expected to sell about 13,000 jewel-like sports cars by the end of the year. Less than it sells in a day. But FactSet estimates that these coveted cars will ship with an average selling price of around $322,000 apiece.

Even at that price, Ferrari has a long waiting list. The company limits annual production to maintain pricing power and exclusivity. This is a happy situation that gives Ferrari a very high profit margin and ensures that the factory is unlikely to go idle any time soon.

Ferrari CEO Benedetto Vigna said most of Ferrari’s models for the year were sold out by early November. Third Quarter Financial Results Announcementand he expects demand to be fine in 2023 no matter how the global economy behaves.

Vigna has good reason for that view. Ferrari has several new models to keep its waiting list long, including the first SUV-like car, a sleek V12-powered four-door. called purosange It starts at around $400,000 in the US, but even at that price, demand for a four-door Ferrari is strong. Ferrarri has yet to start shipping the Purosangue for several months, but the company temporarily stopped taking orders last month after selling out the first two years of production.

“The company’s focus on the unique quality and performance of its vehicles is unwavering, driven by resilient financial performance, significant intangible brand value and a true sense of ownership,” BofA Securities analyst John Murphy said in an investor interview. It has driven the status of luxury goods.” The December 13th note reiterates Ferrari’s buy rating and $285 price target.

Tesla story

next, Teslahas proven to be one of the best auto stocks for investors in recent years thanks to a tech-like valuation from Wall Street. .

many Tesla stock drop I’ve been here since CEO Elon Musk Acquired social media platform Twitter. The stock has fallen more than 50% since trading closed on October 27.

Oppenheimer analyst Colin Rusch said, “The rise in negative sentiment on Twitter could persist in the long term, resulting in limited financial performance and a continued overhang on TSLA. I think it has potential,” he said. wrote this in a note Monthly downgrade stocks to perform from outperforming.

Wall Street analysts expect 2023 to be another volatile year for auto stocks. Here’s how legacy automakers and emerging EV start-ups performed this year:

  • Ferrari (RACE): -18%
  • Stellantis (STLA): -25%
  • Toyota (TM): -26%
  • Nissan (NSANY): -35%
  • General Motors (GM): -43%
  • VW (VWAGY): -46%
  • Ford (F): -46%
  • Fisker (FSR): -57%
  • Tesla (TSLA): -68%
  • Nio (Nio): -68%
  • Rosetown (RIDE): -69%
  • Nikola (NKLA): -75%
  • Rivian (RIVN): -82%
  • Lucid (LCID): -83%
  • Canoe (GOEV): -86%

– CNBC’s Michael Bloom Contributed to this report. Ferrari outperforms EV makers like Tesla

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