RACE - Ferrari: A Cautious Buy On This Luxury Powerhouse

2024-05-09 03:23:53 ET

Summary

• Ferrari's core earnings grew 13% despite flat deliveries, driven by high-end models and customization.
• The company's success depends on maintaining a brand image, navigating economic cycles, and adapting to changing consumer preferences.
• Ferrari's management team, low institutional shareholder turnover, and healthy financials make it a cautious buy despite recent stock decline.
• Initiating coverage with a cautious buy based on Ferrari's healthy financials, strong management team, and multi-year order book. However, near-term volatility is possible due to approaching high resistance levels.
• My analysis specializes in identifying companies that are experiencing growth at a reasonable price. Rating systems don't consider time horizons or investment strategies. My articles aim to inform, not to make decisions.

Investment Thesis

Ferrari ( RACE ) reported earnings on May 7. Their core earnings grew 13% despite flat deliveries, driven by high-end models and customization. CFO Antonio Picca touted “ positive business trends ” and a full order book, but sticking to full-year forecasts left investors wanting more. RACE stock fell around 5.5% after the report, despite analysts praising strong margins and Ferrari’s commitment to its electrification plans....

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