Ferrari Trade Call - Watch for a Buy at $250
"Now, our final stock is one of my favorites, and it's on my list of 33 stocks that I want to own forever. Ferrari stock is down near its 52-week low – down 20% in the last year and 25% in the last 6 months. The stock's currently at 360. I hit the analyze button and got a low price of 180, a high price of 450, and a middle price of 290. I have my watch list at 250 per share. That entry price of 250 is my signal to buy when the stock drops to that level."
The analyst expresses strong long-term conviction in Ferrari, describing it as a dream business with a prestigious brand. Despite recent short-term price drops, the actionable takeaway is to watch for an opportunity to buy at 250 per share, which would offer a more favorable entry based on the analysis.
Ferrari (RACE) Cautious Outlook
"Ferrari stock is also a little bit in a downturn. Ferrari shares sink by most since 2016 on cautious forecast. They had this investor day and they gave 2030 guidance and it was not really some stellar guidance. Slow growth expected ahead with a little bit of growth in earnings per share and free cash flow. In the best case, if earnings come in at half a dollar, the market could see a P ratio drop to 10, pricing the stock at just five, which would be an absolute bargain."
The speaker discusses Ferrari's current struggles, pointing to weak guidance and a downturn in performance, while also hinting at a potential turnaround if earnings improve, setting up a scenario where the stock might become a bargain at a much lower valuation.
Potential Buying Opportunity in Ferrari (RACE)
"I'll give you an example today, the day we're recording this. Um Ferrari stock is down like 14 or 15%. And um it's not a stock I own. It's not a stock in the portfolio. I don't own it per personally. Um, but I can't act on it today in the portfolio if I wanted to because I haven't done enough research on it. I understand that Ferrari is a, you know, very unique auto maker, right? I understand that it has an elevated luxury brand and very closely controls supply. Even though I think today would be a good buying opportunity based on what I know at this point, I haven't run it through the checklist yet."
John discusses Ferrari stock being down 14-15% and characterized by its unique luxury brand and controlled supply. He considers it a potential buying opportunity, though he remains cautious by noting that he hasn't completed his full research.
Ferrari Scales Back Electric Ambitions Amid Share Decline
"Yes. So, they have scaled back their electric ambitions essentially. So, they now expect only 20% of their 2030 lineup is going to be fully electric. That's half of what they previously expected. They had expected 40%. And essentially they're filling that gap with their fully uh their combustion cars. So that will now be 40%. So they're doubling their combustion offerings. Essentially showing kind of a renewed focus on engines and that has obviously defined Ferrari for decades. So they're kind of going back to their core following a lot of other car makers that have also pulled back from from electric ambitions. It's it's obviously very expensive. Uh there's been kind of a failure to get enough customers. Um, so Ferrari shares are are dropping almost 2% this morning. Um, we'll be keeping a close eye on them though throughout the morning cuz they're they they've got a couple markets day and they're planning to announce their financial targets."
In the segment on Ferrari, the speaker details a strategic shift where Ferrari is reducing its electric ambitions in favor of its traditional combustion models, now expecting only 20% of its 2030 lineup to be electric. This strategic pivot, combined with a noted share drop of almost 2% and challenges in customer acquisition, presents near-term uncertainty for the stock.
Ferrari (RACE) Investment Commentary
""Ferrari is synonymous with wealth and luxury. No other automaker can demand a premium quite like Ferrari can. The brand reputation is unmatched, even though the company faces challenges in the U.S. market and with its EV strategy. The financials look strong, with high revenue and profit growth as well as a robust balance sheet. Based on the current valuation, I expect around 10% returns over the next five years, with some caution due to premium pricing and macro cyclical risks.""
The speakers provided a detailed assessment of Ferrari (RACE), emphasizing the unparalleled brand strength, solid financial performance, and strong global presence. While they note some concerns in the U.S. market adoption and the evolving EV strategy, the overall commentary is positive with an expected 10% return over the next five years. The cautious yet optimistic tone highlights Ferrari as a resilient, premium stock suitable for long-term investors.