Ferrari Plunges 13% on Wall Street — Worst Drop Since IPO
While the fundamentals remain strong, the market's focus has shifted to how Ferrari will maintain profitability.
Quick overview
- Ferrari's stock dropped nearly 13%, its largest single-day decline since going public, despite beating financial expectations.
- The selloff was triggered by concerns over future profitability following the company's announcement of price cuts in the U.S.
- Analysts warn that these price adjustments could pressure profit margins amid slowing sales growth.
- Ferrari reported strong second-quarter results, with revenue of €1.787 billion and adjusted net profit of €425 million, but market focus remains on profitability challenges.
Ferrari’s stock plunged nearly 13% on Wall Street—its steepest single-day drop since going public—even after the Italian supercar maker posted financial results that beat Wall Street expectations. The selloff was driven by growing concerns over the company’s future profitability.
The sharp decline came after Ferrari announced plans to cut prices in the U.S., one of its key markets. According to analysts at Citigroup, this move could pressure profit margins amid slowing growth in both sales volumes and average vehicle prices. Investors are now closely watching how Ferrari’s operating margins will hold up in the second half of the year.
The pricing change is part of Ferrari’s strategy to adjust U.S. vehicle pricing now that tariffs on European Union-made products are expected to fall from 27.5% to 15%. The price cuts aim to roll back earlier increases introduced in April, but markets worry this will weigh on earnings.
Solid Results Overshadowed by Margin Concerns
Despite the negative market reaction, Ferrari delivered strong second-quarter results that exceeded analyst forecasts.
Revenue came in at €1.787 billion, up 4% year-over-year at constant currency and in line with expectations. Of that, €1.507 billion came from car and parts sales, and €205 million from commercial partnerships.
Adjusted net profit reached €425 million, up 3% from the same quarter in 2024. Earnings per share stood at €2.38, beating the market consensus of €2.12.
Ferrari also reported it delivered 3,494 cars during the quarter—10 more than the same period last year. Deliveries were distributed across Europe, the Middle East, and Africa (1,646 units); the Americas (993); China, Hong Kong, and Taiwan (274); and the rest of Asia-Pacific (581).
While the fundamentals remain strong, the market’s focus has shifted to how Ferrari will maintain profitability in the face of pricing pressures and a slower sales outlook.
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