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Ferrari: The Stock May Decline But I Am Optimistic

Dec. 04, 2021 3:45 AM ETFerrari N.V. (RACE)


  • Ferrari announced that it expects to increase its target market by offering a larger product range.
  • With more cars in the market, customers may not perceive the brand as exclusive. As a result, they may not be willing to acquire that many cars.
  • I used a WACC of 7.5%. With a lower EV/FCF and exit multiple of 78.5x, the implied fair price would equal $175.
  • With that, if the engineers successfully develop electric cars that can compete with the new models from the United States and China, sales will most likely spike.
  • I am also quite optimistic about the new hybrid engines included in the new SF90 Stradale and SF90 Spider. The new electric engine technology that RACE is preparing could dramatically change the driving experience.

The words risk, medium, high and low written on wooden blocks. Risk assesment, analysis or risk taking concept

cagkansayin/iStock via Getty Images

Ferrari (NYSE:RACE) is not only launching many new models in the coming years, management is also designing electric vehicles. In my view, with sufficient marketing efforts and a growing number of independent collectors, the exclusivity of RACE’s brand

This article was written by

I am an financial advisor living in Europe. I conduct due diligence for clients across multiple sectors. I hold more than 15 years of expertise.I only write about my opinion. Investing in securities involves risk of loss that readers should be prepared to bear. No investment process is free of risk; no strategy or risk management technique can guarantee returns or eliminate risk in any market environment.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of RACE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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