Shares in Ferrari (RACE:NYSE) raced 13% ahead to a new all-time in US trading (1 Feb) after the iconic Italian luxury car maker topped analysts’ fourth quarter estimates and said its order book remained strong.

News that seven-time Formula 1 world champion Lewis Hamilton will move to Ferrari from Mercedes in 2025 on a multi-year contract also gave the shares an extra boost.

The share price gain reverses a soft patch which saw them drop by a tenth from mid-December. Over the last year the shares are up 47% and almost 600% over the last five years.

Luxury peer Porsche (PAH3:ETR) responded, rising 3% to €47.50, and Mercedes-Benz Group (MBG:ETR) saw similar gains after the up-market automaker announced strong cash flow growth overnight.

FERRARI PROFIT TOPS €1 BILLION

Fourth quarter sales jumped 11% year-on-year to €1.52 billion, slightly ahead of consensus estimates, while annual net profit surged 34% to €1.25 billion.

Full year sales grew 17% to €5.97 billion as shipments increased 3.3% to 13,663 units.

The company generated €932 million of free cash flow in 2023 and has earmarked around €800 million for distribution to shareholders via dividends and share buybacks.

Chief executive Benedetto Vigna commented: ‘The record 2023 results, the ambitions that we have on 2024, together with the exceptional visibility on our order book allow us to look at the high-end of 2026 targets with stronger confidence.’

Ferrari’s long-term ambitions include delivering EBITDA (earnings before interest, tax, depreciation, and amortisation) of €2.5 billion to €2.7 billion by 2026 representing a margin on sales of between 38% and 40%.

For 2024 the company is guiding for revenue to climb to more than €6.4 billion and adjusted EBITDA to reach at least €2.45 billion, up from €2.28 billion in 2023.

ANALYST VIEW

Bernstein analysts said: ‘We believe there is room for guidance to creep up over the year as Ferrari gains more visibility on personalisation rates.’

This refers to the premium rates customers pay to personalise their cars with revenue from this segment representing nearly a fifth of total revenues in 2023.

The rally in the share price means Ferrari's market value is closing in on €100 billion, making it more valuable than Mercedes-Benz, Porsche and Aston Martin Lagonda (AML) combined.

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