RACE: Share Buyback Program And Dividend Hike Will Drive Long-Term Upside

Ferrari's analyst price target has been trimmed slightly, falling by approximately $2.55. Analysts cite higher fixed cost expectations and a more cautious stance on near-term earnings, despite ongoing confidence in the company’s premium brand positioning and long-term growth opportunities.

Analyst Commentary

Recent analyst actions reflect a divided outlook on Ferrari's prospects, with both bullish and cautious perspectives shaping current sentiment around the company's shares.

• Bullish analysts emphasize the robustness of Ferrari’s business model, particularly as new product launches are expected to enhance pricing power and support the company’s long-term financial targets.
• There is strong confidence in Ferrari’s premium brand positioning, with ongoing expectations for durable returns on capital and margin expansion over time.
• Upside is seen in Ferrari’s planned product mix and operational execution, with the potential for the company to achieve its 2030 goals ahead of schedule if execution remains strong.
• Several bullish analysts have initiated or maintained "Buy" and "Overweight" ratings, citing Ferrari as a compelling long-term investment within the luxury sector, especially when comparing it to high-value peers.

• Bearish analysts have trimmed their price targets amid concerns over rising fixed costs, which may weigh on near-term earnings performance.
• Some experts express caution given the company’s updated guidance, suggesting that muted expectations for upcoming quarters could pose a temporary headwind to the stock.
• Valuation is a point of scrutiny, with a few analysts now applying a discount to Ferrari compared to other luxury brands. This signals concerns about sustaining a premium relative to peers like Hermes.
• Cautious sentiment also stems from a perceived need for Ferrari to restore investor confidence, particularly after recent estimate revisions and capital markets updates.

What's in the News

• Ferrari plans to release a new digital token targeting its wealthiest customers. This token is aimed at enabling exclusive auctions for high-end models such as the Ferrari 499P (Reuters).
• The Board of Directors of Ferrari N.V. has authorized a new share repurchase program, allowing the company to buy back up to €3.5 billion worth of its shares.
• Ferrari approved an increase in the proposed dividend payout to 40% of adjusted net profit starting with the 2025 results. The company anticipates a cumulative dividend distribution of approximately €3.5 billion between 2027 and 2031.
• The company revised its 2025 guidance and now expects net revenues to be at least €7.1 billion, up from previous forecasts.
• Ferrari issued new guidance for 2030, targeting around €9.0 billion in revenues and an EBIT margin of at least 30%, supported by an enriched product mix and growth in the racing and lifestyle segments.

Valuation Changes

• Fair Value has decreased modestly from $468.82 to $466.27, reflecting a cautious adjustment in expectations.
• Discount Rate has fallen from 15.56% to 14.52%, suggesting a lower perceived risk or cost of capital.
• Revenue Growth projections have edged down from 6.61% to 6.53%, indicating slightly tempered expectations for top-line expansion.
• Net Profit Margin is expected to increase from 23.40% to 23.64%, reflecting improved profitability assumptions.
• Future P/E has declined from 55.16x to 51.45x, signaling a more moderate valuation relative to projected earnings.