Ferrari NV (BIT:RACE) has been initiated with a “buy” rating and a €484 price target by Berenberg, which described the company as “a consensus long-term holding that deserves a high-quality luxury premium,” citing its durable margins, brand strength and pricing power.
Shares of the Italian luxury sports carmaker were up 2.5% at 05:20 ET (09:20 GMT).
The brokerage set Ferrari apart from other automakers, highlighting its operating margins of about 30%, free cash flow conversion of more than 75% and return on invested capital above 30%.
Analysts said Ferrari “stands apart from the auto sector as a Hermès-style luxury compounder,” making its shares more comparable to high-end luxury goods makers than traditional car companies.
At the Milan close on Monday, Ferrari traded at €406.70, giving the company a market capitalization of €72.3 billion. Berenberg valued the stock at 24 times EV/EBITDA for 2027, applying a 10% discount to Hermès.
The brokerage projected Ferrari’s sales will grow from €7.05 billion in 2025 to €8.67 billion in 2027, while adjusted EBIT is expected to rise from €2.03 billion to €2.74 billion in the same period. Earnings per share are forecast to increase from €8.75 in 2025 to €12.15 by 2027.
Berenberg said Ferrari’s strategy of producing “one less car than the market demands” underpins its pricing power and exclusivity. The company has an 18- to 24-month order backlog, with 81% of 2024 sales going to existing owners.
Personalisation has become a key driver of growth, rising to 20% of car revenue, or about €80,000 per vehicle in 2024.
“We believe Ferrari has a unique ability to launch and sell extremely high-value Special Series and limited-edition models at a regular cadence in order to support ASP growth and profitability,” the brokerage said.
The analysts flagged catalysts including the upcoming capital markets day in October, the ramp-up of the €3.9 million F80 hypercar, which has already sold out its 799-unit run, and the launch of the first fully electric Ferrari, the Elettrica, in 2026.
Analysts projected operating margins will reach 32% in the next five years, driven by price, product mix and personalisation, even as shipment volumes remain flat in 2025 before resuming modest 2% growth through 2030.
Still, risks remain. Berenberg noted potential challenges if Ferrari overextends volumes or misjudges demand for electric models.
Owner feedback suggests skepticism about the Elettrica, with one poll showing 77% of respondents would “never” buy the model.
“Debate centres on whether Ferrari’s first EV will be able to preserve the brand’s core DNA enough to resonate with its clientele,” the brokerage said.
Despite these concerns, the analysts pointed to Ferrari’s resilience in past downturns, noting it maintained double-digit margins during the global financial crisis and the COVID-19 pandemic.
With limited exposure to China at about 8% of revenue, compared with peers averaging 18%, the company is also less vulnerable to geopolitical risks.
“Ultimately, we view exclusivity as core to the Ferrari brand and its prospects for future growth,” Berenberg said.
“So long as demand continues to meaningfully outweigh supply, we believe Ferrari can continue to increase prices and modestly grow volumes to achieve double-digit earnings growth.
Source :
https://www.investing.com/news/stock-market-news/ferrari-gets-buy-rating-484-target-as-berenberg-sees-luxury-growth-ahead-4239992
