Ferrari is worth as much as 12 billion euros on the open market based on Chairman Sergio Marchionne’s most optimistic blue-sky estimate. The true value will be a hot topic for months.
Fiat Chrysler started this debate on Wednesday when it said it would spin off its 90 percent stake in the supercar maker. The IPO is expected in June 2015.
Right now any number is good number so there have been some wildly different valuations.
The most realistic estimate to me is about 5 billion euros. This number comes from taking Ferrari’s revenue -- 2.33 billion euros -- and multiplying by two. The calculation is commonplace when determining the value of a luxury automaker. Exane Paribas’ Stuart Pearson also sees Ferrari as a luxury carmaker and thus values it at 5.5 billion euros.
Marchionne, however, argues that Ferrari’s value should be calculated with the same formula used for luxury goods companies, which is nine to 12 times EBITDA (earnings before interest, taxes, depreciation and amortization). Based on Ferrari’s 650 million euro EBITDA last year it would be worth between 5.85 billion and 7.8 billion euros. But before that huge number sinks in consider this: Marchionne foresees Ferrari’s EBITDA eventually exceeding 1 billion euros, which would give Ferrari a valuation of 9 billion to 12 billion euros.
Barclays Research’s Christina Church considers Ferrari a hybrid -- half luxury carmaker, half luxury goods maker -- resulting in a value of 8.7 billion euros.
Mediobanca’s Massimo Vecchio has two views: bullish is 8.6 billion euros, bearish is 7.1 billion euros.
Banca Akros’s Gabriele Gambarova has an average valuation of 7.2 billion euros.
Time will tell which of these scenarios is bluer than the others.