Ferrari shares have struggled of late. Morgan Stanley says concerns are overblown
Ferrari is likely to regain ground as the Italian company blows past concerns over its latest product offerings and broader growth prospects, according to Morgan Stanley. The investment bank upgraded the carmaker to overweight from equal-weight. It also raised its price target on shares to $438 from $388, implying 23% from Friday’s close. “The de-rating now overstates brand risk,” analyst Edouard Aubin said Monday in a note to clients. “Checks show that Ferrari is intact, residuals bottoming, Luce priced in, and wealth creation plus pipeline optionality support a re-rating.” Ferrari stock has fallen 23% over the past year. RACE 1Y mountain Ferrari stock has plunged 23% over the past 12 months. Shares also suffered in recent weeks after the luxury carmaker underwhelmed fans with its new electric vehicle, Luce. The stock declined 5.6% in the trading session following the car’s debut. Investors have also expressed concerns over the company’s hybrid residual values. “That de-rating was initially understandable,” Aubin wrote. “However, our latest work suggests the market has moved too far in pricing these issues as terminal brand risk.” Morgan Stanley’s check-ins with car dealers in the U.S. and Europe “do not point to a damaged Ferrari brand,” Aubin also noted. “Ferrari’s long-term equity story: special series, scarce allocations, Icona/supercar products and future collectibles.” Morgan Stanley’s call falls in line with consensus on Wall Street. Of the 13 analysts covering Ferrari, 11 have a buy or strong buy on the stock, LSEG data shows.
