Ferrari is worth as much as 12 billion euros, says Sergio Marchionne

Article by Christian Andrei, on November 3, 2014

According to Ferrari’s new chairman Sergio Marchionne, the Italian Prancing Horse is worth as much as 12 billion euros. However, other people think that Ferrari isn’t worth that much and that 5 billion euros is the proper number. Still, Sergio Marchionne says that Ferrari’s value should be calculated with the same formula used for luxury goods companies.

For those who don’t know, the formula used for luxury goods companies is nine to 12 times earnings before interest, taxes, depreciation and amortization (EBIDTA). Using the formula for Ferrari’s 65- million euro EBIDTA for 2013, Ferrari is worth between 5.85 billion and 7.8 billion euros.

In order to obtain 12 billion euros, Marchionne forsees company’s EBIDTA to 1 billion euros. The bad news is that Sergio Marchionne is the only person who says that Ferrari has a value of 12 billion euros.

For example, Barclay Research’s Christina Church says that Ferrari should be considered half luxury carmaker and half luxury goods maker, which results in a value of 8.7 billion euros.

Banca Akros’s Gabriele Gambarova says that Ferrari has a value of 7.2 billion euros while Mediobanca’s Massimo Vecchio believes the value is 8.6 bllion euros.

As you may know already, last week Fiat Chrysler announced that it will spin off 90 percent stake in Ferrari and that it will sell to the public the rest of 10 percent. [source: automotive news - sub. required]

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