In another reminder that electric is the direction of travel for auto-makers, hybrid Ferraris have outsold pure-play petrol models for the first time. This is a significant milestone as a lingering grumble about the green shift has been whether supercars and their fans would be prepared to come along for the ride.
“The answer seems to be a resounding yes, which piles on the pressure for other names in the camp to take their electrification strategies seriously,” observed Sophie-Lund-Yates, an equity analyst with Hargreaves Lansdown.
Investors have been buying Ferrari NYSE:RACE stock this week: shares in the company jumped from EUR 281 to hit EUR 307 in Italy this week. Ferrari shares are already at an ATH, with many stock investors anticipating more to come.
Ferrari stock has already been rated as one of the European Magnificent Seven – luxury brands that had been trading at a premium. The company is also rated as one of the most profitable in Europe, if you measure it on a profit per employee basis. In this case Ferrari ranks at #7, between energy play Orsted and Danish shipping line Maersk.
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Half of Ferrari’s revenue comes not from the sale of cars, but in fact from merchandise. The company made about GBP 1 billion in profit in 2022, but that still comes out at a punchy £227,364 per employee. This is because it only employs 4500 people, making it relatively tiny by car manufacturer standards.
It’s all about the branding in our view: more people own something with Ferrari branding on it than own an actual car. Ferrari just announced that Scuderia Ferrari has renewed its multi-year partnership with sports company PUMA, which will continue to be the licensing partner for Ferrari-branded products and the supplier of F1 team and race wear for Ferrari. This is a collaboration which stretches back to 2005 and has obviously been extremely profitable for both parties.
“Ferrari’s financial results from Q2 demonstrated decent performance, but will likely only help Ferrari remain on par with its peers,” said stock data specialist Bridgewise in its recent report on the company. “We do believe, though, that macro-related market conditions will influence its performance more significantly than its individual results.”
Source: Bridgewise
What about Aston Martin Lagonda then?
Aston Martin’s LON:AML not expected to roll out its first hybrid models for a little while. The broader auto market continues to face challenges in the face of consumer nervousness, but those at the luxury end of the spectrum continue to have a lot more wiggle room.
Looking at the chart above, though, and Aston Martin’s fundamentals are starting to look rosy. It outperforms Ferrari on several metrics. The problem is the share price, which is off at 202p at time of writing, down from a recent peak of close to 400p. That’s not brilliant, and well off the levels we saw for the stock back in 2021.
Aston Martin continues to operate in the high end market, which means it does not need to worry as much about the wider consumer issues some manufacturers are starting to feel, with many retail buyers deferring new car purchases, especially in key European and Asian markets. Given the momentum already being enjoyed by Ferrari, the roll out of an electric vehicle strategy feels to us like it should be a priority.
