Ferrari shares jumped by 7% on Monday as the Italian manufacturer reported earnings of $1.02 billion for Q1 2020, outperforming analyst’s expectations of $852 billion. The automaker’s overall market capitalization reached $30.1 billion early Monday before leveling out at $29.8 billion later in the day.
Ferrari’s strong Q1 performance propelled it ahead of General Motors in overall valuation, with the Detroit automaker’s market cap falling below $29.3 billion on Monday. While Ferrari only delivers about 10,000 vehicles per year, analysts believe the company’s strong brand recognition and large profit margins put it in good standing to weather the COVID-19 storm throughout 2020. GM is expected to report its earnings on Wednesday, which will provide a clearer picture of the automaker’s current standing.
Despite the COVID-19 pandemic, Ferrari vehicle deliveries actually increased by 5% year-over-year in Q1 2020. The automaker’s factories in Maranello and Modena came back online this week after COVID-19 related shutdowns, as well, and should be back running at full capacity before the end of the week.
“After the longest closing in its history due to the Covid-19 pandemic, production will build up gradually to resume fully on Friday, May 8, in alignment with Government regulations,” the company said media release sent out Monday.
Ferrari is also now worth more than Ford, which saw its market cap fall to $19.2 billion on Monday. Most notably, however, its value is much higher than Fiat Chrysler Automobiles’ of $13 billion. FCA offloaded Ferrari in an IPO back in 2015, with the Italian supercar brand tripling in value since going public.
It’s currently not clear when the Detroit Big Three’s factories will be able to restart production. The companies are currently in talks with the UAW to bring certain facilities back online sometime this month, though the union is apprehensive to send its members back to work early and put them at risk of contracting COVID-19. A number of UAW workers have died from the virus, including eight Ford employees and 15 FCA employees. No unionized GM employees had died due to the disease as of this writing.
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Comments
Ferrari is a low volume product for High End Buyers that retain their buying power even in down economic times. They also take their investment and buy items like cars property and collectibles.
On the other hand all the cuts GM made in the last couple years that were draining money will pay off big now during a tough economic time.
Some may scoff it off as luck but being prepared for all situations is important in keep a company viable in todays ever changing global conditions.
Does not Tesla produce even less cars than 10,000 cars per year? And has or had a bigger market capitalizstion than GM and Ford together?