LUCA CIFERRI

Ferrari's value is not so hot

Luca Ciferri is chief correspondent at Automotive News EuropeLuca Ciferri is chief correspondent at Automotive News Europe
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Every time Ferrari's parent company Fiat S.p.A. is short of cash, rumors arise that the Italian industrial giant and owner of Chrysler may float its highly profitable luxury sports car brand on the stock exchange.

The latest reports say an initial public offering could value Ferrari as high as 4.5 billion euros ($6.3 billion). Such a sum is 1.8 times the 2.6 billion euros in revenues expected this year for Ferrari and Maserati, Fiat's other sports car brand.

Credit Suisse analyst David Arnold notes that BMW shares would be worth over 230 euros, four times the almost 57 euros they traded in early September, if the same multiple is applied to shares in the German premium automaker.

Many financial analysts apply multiples used for luxury goods companies to Ferrari rather than the lower numbers used for automakers.

Nevertheless valuing Ferrari at 4.5 billion euros is more wishful thinking than a sound business valuation. Fiat, which also owns Alfa Romeo, Lancia, Maserati and 53.5 percent of Chrysler, is worth just 5.3 billion euros as a whole. It seems that when people talk of Ferrari, it's not just the cars that are red hot.

You can reach Luca Ciferri at lciferri@crain.com.

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