Tuesday, January 31, 2023

Ferrari outshines electric vehicle makers like Tesla

The Ferrari SP38 is seen at the 2022 Goodwood Festival of Speed ​​on June 23 in Chichester, England.

Martin Lucy | fake pictures

This year, it wasn’t a question of which automaker stocks performed best, but which stocks managed to avoid some of the worst selling pressure of the year.

After a significant increase in auto inventories in 2021, the year proved bleak as the EV startup bubble burst, low vehicle inventories and recession fears as rising interest rates and “general demand destruction for industry sales.”

Many of the world’s biggest automakers have performed well financially this year, but it hasn’t been enough to allay external economic concerns that their most profitable days may be behind them.

We brace for a challenging FY23 outlook for auto earnings amid falling demand (higher interest rates), deflation (lower price/mix), and adverse swings in the supply/mix balance. demand for electric vehicles,” Morgan analyst Adam Jonas Stanley wrote in a report to investors. statement earlier this month.

The FactSet Automotive Index, which includes automakers and aftermarket parts, is down about 38% this year through the end of Tuesday. All major automakers and EV startups see double-digit downgrades this year, partially or throughout 2021.

Many times promising EV startups have been the biggest losers, as some ran into capital problems or were unable to scale up production as quickly as they could have. Rivian, Obvious, canoe why nicholas 76% experienced a decline or more year.

Traditional automakers have moderated the decline in their stocks compared to EV startups, but America’s largest automakers… General Motors why motor i go – Both experienced declines of over 40%, as well as an unexpected year-end rally stellar, Nissan, toyota why Volkswagen In these, there has been a decline of more than 25 percent.

Ferrari wins by losing less

The company with the smallest decline was FerrariThat’s down just 18% year-to-date, making it the automaker’s best-performing stock of the year.

Reasons for the feat: First, the long-established high-end sports car maker isn’t like other automakers: It expects to sell about 13,000 jewel-like sports cars by the end of the year. Motors are selling less this year than giants like General, according to FactSet estimates, but these iconic cars are walking out the door at an average retail price of about $322,000.

Even at these prices, Ferrari’s waiting list is long: the company limits its annual production to maintain its pricing power and exclusivity, a fortunate situation that gives Ferrari exceptionally strong profit margins and ensures that that its factory won’t be shutting down any time soon. ,

Most of Ferrari’s models were sold out by early November, CEO Benedetto Vigna said during Ferrari’s third-quarter earnings call, and he does not expect problems with demand in 2023, regardless of how the market performs in the global economy. .

Vigna has good reason for this opinion: Ferrari has several new models on the way to maintain that long waiting list, including its first SUV, a sleek V12-powered four-door called the Purosangue, priced at Rs. is approximately US$400,000. , Dollars in America start at this price too, and even for a four-door Ferrari, demand is high. Although Ferrari will not supply the Purosangu for several months, the company temporarily stopped taking orders after it sold out last month. during the first two years of production.

“The company’s unwavering focus on the unmatched quality and performance of its vehicles has fostered a track record of strong financial performance as well as significant intangible brand value and true luxury status,” BofA Securities analyst John Murphy told investors. ” Note reiterating Buy recommendation and $285 price target for Ferrari on March 14 and 13.

Tesla story

and then there’s TeslaProved to be one of the best auto stocks for investors by Wall Street in recent years because of its technology valuation, shares of the electric vehicle maker have plunged more than 68% year to date.

The decline in Tesla shares can be attributed to CEO Elon Musk’s acquisition of social media platform Twitter, which has fallen more than 50% since the deal closed on October 27.

“We believe growing negative sentiment on Twitter could persist over the long term, hampering financial performance and becoming a continued glut for TSLA,” Oppenheimer analyst Colin Rusch outperformed the stock in a note this month. Wrote downgrading in achievement.

Wall Street analysts expect another busy year for auto stocks in 2023.

  • Ferrari (Race): -18%
  • Stellantis (STLA): -25%
  • Toyota (TM): -26%
  • Nissan (NSANY): -35%
  • General Motors (GM): -43%
  • Volkswagen (VWAGY): -46%
  • I Go (F): -46%
  • Fischer (FSR): -57%
  • Tesla (TSLA): -68%
  • Knock (NOK): -68%
  • Lordstown (driving): -69%
  • Nicolaus (NKLA): -75%
  • Rivian (RIVN): -82%
  • Lucido (LCID): -83%
  • Kanu (GOEV): -86%

– Informationmiguel flowers contributed to this report.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news