The entrepreneurial essence of Enzo Ferrari: between financial market and customers

On 9 October, Ferrari presented its 2026-30 plan to the market and the share price lost some €13 billion in capitalisation, plummeting from €420 to €350: to understand what happened, three considerations are necessary.

The first: being listed means running on a treadmill. When a company publishes its future plans these are discounted to the average cost of capital (WACC) and the current share price is determined; if the company then does exactly what it has stated it will grow by exactly its discount rate, i.e. the speed of its treadmill. The market was expecting 10 billion in sales in 2030 with 3.3 billion in operating profit, i.e. 33%; Ferrari quoted a target of around 9 billion in sales by that date with at least 2.75 billion in operating profit, i.e. 30%: the market's expectations immediately adjusted and were reflected in the share price: the treadmill moved at a slower speed. This shows how the stock exchange is of the right and entrepreneurs of the left: the stock exchange is interested, in fact, in the right side of the balance sheet where there are the flows generated and free for distribution; on the left side, instead, there are the investments that are needed to generate products appreciated by customers.

The second: long-term vision pays... in the long term. What happened is an excellent example to explain what long-term vision is: it is the difference between two numbers: 3% and 5%. To value a company, you discount the future cash flows generated over the plan period and then estimate average perpetual growth. In the case of Ferrari, the market expected a growth of about 10% in the first 5 years (short to medium term) and then 3% (long term), the management declared an average growth of 5.5% in the short term to ensure stable and consistent growth in the long term. If you want to grow in the long term, you have to give up excess in the short term. Let's say Ferrari sets a target of 5.5% in the short term instead of 10%, in order to be able to continue to grow 5%, instead of 3%, in the long term. You could have announced more 'visionary' growth in the short term; Ferrari has no shortage of customers, it would have been easy to produce more, launch more models and grow faster for five years; but this growth, which is great for the short term, would violate the entrepreneurial essence by damaging the long term.

 The third consideration: customers are the only thing that matters. The entrepreneurial essence imprinted by the founder must be protected and adapted over time because it is this that enables the company to do a good job for customers. During the presentation of the plan, the average age was given as 52 years; and indeed, the customers are described as follows: "These 50-year-olds are men who wish on the one hand to reward themselves for their economic rise by fulfilling an old dream, and on the other hand to seize a long moment of youthful passion from life. At the end of a working week, they sit behind the wheel of this powerful, nervous, snappy car with its special mechanics, and in the physical joy of mastering it they experience a physical distraction, a beneficial relaxation of nerves, a relaxing emotion, which restores to them feelings of the years gone by'. The interesting thing is that the 52 years have been indicated as October 2025, while the phrase is from the founder, Enzo, and dates back sixty years. Ferrari was founded in 1947: it has been addressing the same kind of customers for 78 years and counting them one by one: to date there are 90 thousand.

Over the course of history, 330,000 Ferraris have been produced, always with a rule set by the founder: 'always produce one less car than the market demands'.". This is the secret ingredient that creates the magic formula by which the value of a Ferrari does not diminish with the passage of time.