CFRA downgrades Ferrari stock to Sell on growth concerns

Investing.com - CFRA downgraded Ferrari (NYSE:RACE) from Hold to Sell on Thursday, while significantly reducing its price target from $475.00 to $350.00. The luxury automaker, currently valued at $78.4 billion, trades at a P/E ratio of 43.27x, which according to InvestingPro analysis, indicates the stock is trading above its Fair Value.

The research firm cited concerns that Ferrari’s "multi-year growth streak is hitting a wall," pointing to Q2 results showing shipments increased by only 0.3% year-over-year while revenue grew 4.4%. This marks a significant slowdown from the company’s trailing twelve-month revenue growth of 12.36%.

CFRA lowered its adjusted EPS estimates to EUR8.80 from EUR8.90 for 2025 and to EUR10.15 from EUR10.45 for 2026, suggesting the luxury automaker will struggle to meet market expectations in the second half of 2025 and beyond.

The downgrade reflects CFRA’s view that Ferrari’s stock performance has outpaced its actual earnings growth over the past two years, creating what the firm describes as a "valuation disconnect."

While acknowledging Ferrari remains "a high-quality company and one of the industry’s most valuable global brands," CFRA believes the combination of slowing growth and a "frothy valuation" justifies the new Sell rating and a price target based on a 2026 P/E of 30x, below Ferrari’s 10-year average forward P/E of 40x. Despite valuation concerns, InvestingPro data shows Ferrari maintains a "GREAT" financial health score, with strong cash flows and moderate debt levels. Get access to 16 additional key insights about Ferrari with an InvestingPro subscription.

In other recent news, Ferrari NV reported its second-quarter earnings for 2025, which slightly missed analyst expectations. The company announced an earnings per share (EPS) of $2.38, falling short of the projected $2.40. Revenue also came in below forecasts at $1.79 billion, compared to the anticipated $1.82 billion. These earnings results have been a focal point for investors, as they closely monitor the company’s financial performance. No major mergers or acquisitions were announced in the recent updates. Additionally, there were no reports of analyst upgrades or downgrades following the earnings release. Investors continue to evaluate the impact of these earnings results on Ferrari’s market position.

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