Kepler Cheuvreux lifts Ferrari stock rating to buy, maintains EUR470 target

Published 28/03/2025, 11:20
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On Friday, Kepler Cheuvreux upgraded shares of Ferrari NV (NYSE:RACE:IM) (NYSE: RACE) from Hold to Buy, maintaining a price target of EUR 470.00. The luxury car manufacturer’s stock experienced a significant drop, falling over EUR 100 from its peak in February. According to InvestingPro data, the stock is currently trading at $426.82, with analyst targets ranging from $403.97 to $607.02. InvestingPro’s Fair Value analysis suggests the stock is currently overvalued. Analysts at Kepler Cheuvreux identified the recent placement of shares by Exor (AS:EXOR), one of Ferrari (BIT:RACE)’s major shareholders, and the introduction of new tariffs as key factors that prompted investors to secure profits after the stock’s strong performance over the past two years. The company maintains strong fundamentals, with InvestingPro data showing an impressive 50.13% gross profit margin and healthy revenue growth of 11.83% over the last twelve months.

Analysts at Kepler Cheuvreux see the recent decline in Ferrari’s share price as an opportunity, referring to it as a "pit stop" that presents a favorable moment to adopt a more positive stance on the stock. In light of the recent developments, the firm has made slight adjustments to their revenue projections for Ferrari for the years 2025-2026. These revisions take into account the company’s updated commercial strategy, which has been adapted to address the challenges posed by the newly announced tariffs.

Despite the adjustments to future revenue estimates, Kepler Cheuvreux’s price target for Ferrari remains set at EUR 470.00, based on a Discounted Cash Flow (DCF) analysis. This valuation reflects the firm’s confidence in Ferrari’s financial prospects and the strength of its brand in the luxury automotive sector. InvestingPro reports a "GOOD" overall financial health score, with particularly strong profitability metrics. Discover 15+ additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.

Ferrari’s stock performance had been notably robust in the two years leading up to the recent downturn. The company’s shares had seen impressive gains, which were interrupted by the recent market movements, with a 9.51% decline over the past six months. The upgrade by Kepler Cheuvreux suggests a belief that the recent price drop is temporary and that Ferrari’s stock is poised for recovery, supported by the company’s strong return on equity of 46% and healthy current ratio of 1.76.

The upgrade to Buy from Hold by Kepler Cheuvreux comes at a time when the automotive industry faces various challenges, including supply chain issues and changing trade policies. However, the firm’s steady price target indicates a belief that Ferrari’s premium brand and strategic adjustments will enable it to navigate these challenges successfully.

In other recent news, Ferrari has confirmed its financial targets for 2025, despite the introduction of a new 25% tariff on auto imports by the United States. The company aims for an EBIT of at least €2.03 billion, an adjusted EPS of at least €8.60, and a free cash flow exceeding €1.2 billion. This announcement underscores Ferrari’s confidence in navigating the changing automotive landscape. The company plans to adjust prices for certain models, with increases capped at 10%, to address the potential impact of the tariffs. Barclays (LON:BARC) has upgraded Ferrari’s stock rating to Overweight, citing the company’s strong financial targets and relative resilience in the European automotive sector. Meanwhile, Bernstein has reiterated its Outperform rating, maintaining a price target of $575, and highlighting the affluent customer base’s ability to absorb potential price hikes. On the other hand, Citi has maintained a Sell rating, with concerns about tariff impacts and potential risks to sales volumes in the U.S. market. These developments reflect varying perspectives on Ferrari’s ability to manage the challenges posed by the new tariffs.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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