RACE - Ferrari: I'm Waiting For A Better Valuation (Downgrade)
2024-05-31 13:38:32 ET
Summary
- Nearly 90% of Ferrari's revenue comes from cars, but it also sells fashion, merchandise, and experiences. By 2026, it aims for 60% of vehicle sales to be hybrid or electric.
- Ferrari's 5-year average free cash flow growth is 23.20%, higher than LVMH's but lower than Tesla's. Its equity-to-asset ratio of 0.38 is tolerable due to strong profitability and branding.
- Ferrari is richly valued compared to other automakers but is justified against luxury peers. In my opinion, its forward P/E GAAP ratio of 48 is slightly high at this time.
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Ferrari: I'm Waiting For A Better Valuation (Downgrade)