2024-03-08 12:22:40 ET
Summary
- Ferrari has delivered impressive returns to shareholders, averaging over 20% a year since being spun off from Fiat in 2014.
- The company's strategy of restricting supply and maintaining exclusivity has increased demand, with a 24-month waiting list to buy a car.
- Ferrari's strong financial performance, with record-breaking revenue and profits, justifies its expensive valuation and indicates potential for future growth.
I've yet to meet someone who isn't aware of the brand that is Ferrari N.V. ( RACE ), which puts the company in a unique basket of brands whose names transcend their industries. Coupled with Ferrari's exciting developments and record-breaking financial performance, that leads me to have high conviction in RACE despite an expensive valuation.
Investment View
It's my view that there is still significant upside for this company, and the unique blend of branding power and growth avenues has me bullish. Today, Ferrari has a market cap of $79 billion. But as I break down the different moving parts of the business and their position within growing markets, I have high conviction that the coming years will see Ferrari's value reach between $115-139 billion. This implies a 45-75% upside from today's share price....
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For further details see:
Ferrari: Why It Remains An Attractive Investment For The 2020s