According to a new report, Ferrari’s legendary status as a manufacturer of ultra-luxury high performance cars is assisting the brand reaching a higher value than previously forecasted in its upcoming initial public offering.
The people that have knowledge of the proceeds talked to Bloomberg under condition of anonymity and said the IPO is now pushing for a valuation of up to 11 billion euros ($12.4 billion), higher than Fiat Chrysler Automobiles chief executive officer Sergio Marchionne’s previous pledge of reaching as much as 10 billion euros. Following negotiations with potential investors, parent Fiat Chrysler Automobiles could see Ferrari valued from just under the initial threshold of 10 billion euros to as much as 11 billion euros when 10 percent of the coveted brand is being delivered to the New York Stock Exchange, say the sources, which declined to be named because the arrangements are not public. The official IPO price range could be seen as early as Friday and the presentations to possible stakeholders would start next week, but the sources also warned the Ferrari IPO valuation might be affected by the latest developments of the stock market, highly volatile since VW was engulfed in a worldwide diesel emission cheating scandal.
According to one of the persons, Ferrari’s IPO could see the maker valued in a range of 12 to 14 times expected 2015 earnings before interest, taxes, depreciation and amortization. The luxury automaker, set to be listed in New York under the ticker FRRI, had in 2014 and adjusted Ebitda of 693 million euros, with a profit margin of 25 percent of sales and has already saw its profit increase 8.9 percent during the first six months of the year.