NEW YORK—Based on talks with possible investors, Ferrari could be valued from just under 10 billion to 11 billion euros ($14 to $16 billion Canadian) when owner Fiat Chrysler Automobiles NV sells a 10 per cent stake in the division on the New York Stock Exchange, according to the people, who asked not to be identified because the arrangements are private. Fiat shares traded in New York and Milan jumped to an eight-week high.

An IPO price range will be published in an updated filing as early as Friday, and presentations to possible buyers are slated for next week, said the people. The valuation may change amid market volatility since Volkswagen AG’s diesel-testing scandal emerged last month, they said.

Fiat Chrysler chief executive officer Sergio Marchionne, who’s also Ferrari’s chairman, has insisted for months that the brand should be valued as a luxury-goods maker, such as clothiers Prada SpA or Hermes International SCA, and not as an auto manufacturer. Those companies trade at over 20 times operating profit, more than twice the average valuation of carmakers.

Luxury multiple

The Stoxx 600 Automobiles & Parts index of European carmakers and suppliers is down about 3 per cent since the Sept. 18 revelation of the Volkswagen emissions-test cheating scandal, recovering partly from a drop of as much as 15 per cent late last month.

Fiat Chrysler gained as much as 2.6 per cent and was trading up 2.2 per cent at 13.75 euros as of 11:03 a.m. in Milan following a jump of 4.6 pe recent Thursday in New York. The carmaker has surged more than 25 per cent in New York in the last seven sessions since first details on Ferrari’s valuation were reported, and is at the highest price since mid-August.

“Fiat shares are accelerating following Ferrari’s race to Wall Street,” said Vincenzo Longo, a strategist with IG Group in Milan. “The timing looks right for Ferrari, which waited until the end of the sell-off on the market before setting its price range.”

Ferrari may be valued in a range of 12 to 14 times expected 2015 earnings before interest, taxes, depreciation and amortization, one of the people said. Ferrari, which will be listed in New York under the ticker FRRI, posted adjusted Ebitda last year of 693 million euros after generating a margin of 25 per cent of sales. Profit rose 8.9 per cent in the first half of 2015. Representatives for Fiat Chrysler and Ferrari declined to comment.

“A luxury multiple is justified due to Ferrari’s capital intensity, profit margins at scaled unit production, operating leverage and price inelasticity,” said Adam Wyden, founder of ADW Capital Partners LP, who owns Fiat Chrysler shares.

Ferrari, which has made a point of restricting sales to preserve its models’ high-end reputation, is set to push the boundaries of its exclusivity with plans to increase production of cars such as the 235,000-euro 488 Spider convertible to 9,000 cars in 2019 from about 7,200 vehicles last year, according to a Sept. 22 filing. The carmaker had previously set its limit at about 7,000 cars a year.

“Ferrari is a legend” because of the value of the brand and its track record on profitability, said Lapo Elkann who, along with his brother, Fiat Chairman John Elkann, is part of the Agnelli family that controls the auto manufacturer. At Ferrari, “you don’t sell a car, you sell a dream,” he said in an interview in Milan.

UBS Group AG, Bank of America Corp.’s Merrill Lynch, Banco Santander SA, Mediobanca SpA and JPMorgan Chase & Co. are advising on the IPO.