CFRA cuts Ferrari stock price target to $450, maintains hold

On Tuesday, CFRA analyst Garrett Nelson revised the 12-month price target for Ferrari (NYSE:RACE) shares, reducing it from $460.00 to $450.00, while sustaining a Hold rating on the stock. The adjustment follows Ferrari’s recent earnings report, which showcased a significant earnings beat for the fourth quarter. According to InvestingPro data, Ferrari currently trades at a P/E ratio of 55.3x, reflecting its premium market position. The stock has demonstrated low volatility, with a beta of 0.95 over the past five years.

Nelson explained the price target decrease, stating that it is now based on a forward price-to-earnings (P/E) ratio of 41.6 times for the year 2026, which represents a premium compared to Ferrari’s ten-year average forward P/E of 39.5 times. Additionally, the analyst has modified the adjusted earnings per share (EPS) estimate for 2025 to EUR 8.90, down from EUR 9.10, and introduced an EPS forecast for 2026 at EUR 10.45.

Ferrari reported a fourth-quarter adjusted EPS of EUR 2.14, a 32% increase from the previous year’s EUR 1.62, surpassing the consensus estimate of EUR 1.82. This outperformance was attributed to better-than-anticipated margins. Net revenue climbed 14% to EUR 1.74 billion, exceeding consensus by $80 million, driven by higher prices and a modest 2% rise in shipments. Moreover, Ferrari’s EBIT margin expanded by 260 basis points to 27.0%. The company maintains strong profitability metrics, with InvestingPro showing a robust gross profit margin of 49.8% and an impressive return on equity of 46% over the last twelve months.

Despite introducing a full-year revenue and adjusted EPS guidance for the upcoming year that falls below current consensus—forecasting at least EUR 7.0 billion in revenue and EUR 8.60 in adjusted EPS, compared to the consensus of EUR 7.15 billion and EUR 9.00—Ferrari’s stock price has risen 4%. Nelson suggests that investors are likely looking past the conservative guidance, recognizing Ferrari’s longstanding pattern of understating future performance metrics.

Nelson concluded by acknowledging Ferrari’s impressive earnings consistency, with the company having surpassed earnings expectations for 18 consecutive quarters. However, he believes that the stock is currently fairly valued, despite the positive earnings report and the company’s robust track record. This assessment aligns with InvestingPro’s Fair Value analysis, which indicates the stock is currently trading above its Fair Value. InvestingPro subscribers have access to 15 additional key insights about Ferrari, including detailed valuation metrics and growth indicators, along with a comprehensive Pro Research Report that provides deep-dive analysis of the company’s fundamentals and prospects.

In other recent news, Ferrari N.V. continues to demonstrate robust performance in the luxury car market. The company reported a significant 7% increase in revenue, reaching EUR 1.6 billion, and a substantial net profit of EUR 375 million in Q3 2024. This growth was largely driven by strong demand for the new 12Cilindri coupe Spider and the anticipated F80 supercar.

Analysts from Bernstein and Barclays (LON:BARC) have maintained their positive ratings on Ferrari’s stock, highlighting the company’s strong market position and strategic growth plans. Bernstein reaffirmed an Outperform rating and a steady price target of $575.00, while Barclays maintained an Overweight rating despite adjusting its price target from EUR500.00 to EUR485.00.

In addition, Ferrari announced a multi-year agreement to supply Andretti Formula Racing LLC with power units and gearboxes for their potential entry into the 2026 FIA Formula One World Championship. This strategic move underscores Ferrari’s commitment to the sport and its support for new teams.

These recent developments reflect Ferrari’s ongoing success and strategic growth in the luxury car market. The company’s strong financial performance and positive analyst ratings, coupled with its commitment to Formula One, demonstrate a promising outlook for Ferrari’s future operations.

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