RACE: Future Cash Returns And Guidance Support Premium Positioning Narrative

Our updated narrative on Ferrari reflects a slightly lower fair value estimate of $431.54, down about $3.99, even as analysts on the Street have generally nudged their price targets higher following the company's fiscal 2025 results and initial FY26 guidance.

Analyst Commentary

Street research on Ferrari has been mixed recently, with several firms lifting price targets after fiscal 2025 results and initial FY26 guidance, while others have taken a more cautious stance and trimmed targets or ratings. Taken together, the updates give you a split picture on valuation and execution risk.

Bullish Takeaways

• Bullish analysts have raised price targets in US$ terms, with one lifting a target to $447 and another to $420. They see this as reflecting confidence in the updated models following the fiscal 2025 print and FY26 guide.
• Some bullish views highlight that their estimates now sit broadly in line with management guidance, which they see as reducing near term forecast risk and supporting current valuation frameworks.
• The upward revisions suggest optimism that the company can execute on its plan without major negative surprises. These analysts see that as supportive for long term growth assumptions embedded in their models.
• Target increases after results indicate that, for these analysts, the latest disclosures fit within or improve their existing thesis rather than forcing a reset to lower expectations.

Bearish Takeaways

• Bearish analysts have cut targets in € terms, with some moves from €415 to €360 and €355. This points to a more conservative stance on what they are willing to pay for the stock.
• One house moved from a Buy to a Hold rating with a target cut to €345, citing weaker messaging around expectations. They see this as a communication issue that could weigh on sentiment even if they do not see a change in underlying fundamentals.
• Target reductions following the same fiscal 2025 results and FY26 guidance show that not all analysts interpret the outlook as supportive of prior valuation levels, leading to more muted upside assumptions in their models.
• The combination of downgrades and lower targets suggests a group of bearish analysts is more focused on execution risk and the potential for expectation resets rather than on stretching valuation multiples from here.

What's in the News

• Ferrari plans to recommend a dividend of €3.615 per common share, about 21% above the prior year, for a total proposed distribution of roughly €640 million, subject to shareholder approval at the April 15, 2026 AGM (Key Developments).
• If approved, the proposed dividend would have an expected ex-date of April 20, 2026 on EXM and April 21, 2026 on NYSE, with payment expected on May 5, 2026 (Key Developments).
• Ferrari provided 2026 guidance targeting €7.50b in revenues, giving investors a headline top-line figure to anchor expectations around (Key Developments).
• The company completed a share buyback program announced on June 16, 2022, repurchasing 6,015,933 shares, about 3.34% of its share capital, for €2,000 million, including 717,508 shares for €247.05 million in the October 1 to December 30, 2025 tranche (Key Developments).
• Ferrari is preparing to launch the Ferrari 849 Testarossa in India on March 14, positioned to replace the SF90 Stradale in the local lineup, with pricing expected around INR 100 million ex showroom and a plug-in hybrid powertrain rated at 1,050 bhp (Key Developments).

Valuation Changes

• Fair Value: our estimate has edged lower from $435.53 to $431.54, representing a small reduction in the implied long term valuation.
• Discount Rate: the rate used to discount future cash flows has risen slightly from 13.70% to 13.88%, indicating a modestly higher required return.
• € Revenue Growth: the long run top line growth assumption has eased from 6.50% to 6.34%, reflecting a slightly more conservative view on future expansion in € terms.
• € Net Profit Margin: projected profitability is essentially unchanged, remaining at 23.02% on future earnings.
• Future P/E: the valuation multiple applied to forward earnings has nudged up from 47.34x to 48.31x, indicating a marginally higher earnings multiple in the model.