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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 Takeaways

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 Takeaways

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.

Expanded infrastructure and new models, including electrics, aim to boost revenue and margins through enhanced production flexibility and personalization.
ESG initiatives and brand visibility investments enhance long-term growth and profitability by aligning with consumer trends and fostering engagement.
A potential oversaturation from new model launches could dilute brand exclusivity, while supply and economic challenges threaten brand desirability, margins, and diverse growth.

Catalysts

About Ferrari

Through its subsidiaries, engages in design, engineering, production, and sale of luxury performance sports cars worldwide.What are the underlying business or industry changes driving this perspective?

Ferrari's expansion of infrastructure and product offerings, including the new e-building and paint shop for enhanced personalization, is expected to increase production flexibility, supporting revenue growth and improved net margins through operational efficiencies.
The launch of six new models in 2025, including the anticipation of the Ferrari full electric, is likely to drive revenue growth, capturing both existing and new customers while expanding Ferrari's electrification journey.
Continued focus on personalization, expected to remain around 20% of car and spare parts revenues, enhances the revenue stream due to the higher profit margins associated with bespoke options.
Investment in lifestyle activities and brand enhancement, alongside new racing sponsorships, is intended to foster brand visibility and engagement, contributing to revenue growth and maintaining high profitability margins.
Efforts toward carbon neutrality by 2030, including significant reductions in Scope 1 and 2 emissions through renewable energy use, are expected to support long-term earnings growth by aligning with increasing ESG initiatives and consumer preferences.

Ferrari Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Ferrari's revenue will grow by 8.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 22.8% today to 23.8% in 3 years time.
Analysts expect earnings to reach €2.0 billion (and earnings per share of €11.45) by about March 2028, up from €1.5 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 63.6x on those 2028 earnings, up from 48.7x today. This future PE is greater than the current PE for the US Auto industry at 18.2x.
Analysts expect the number of shares outstanding to decline by 0.6% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 15.78%, as per the Simply Wall St company report.

Ferrari Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The influx of 6 new model launches in 2025 might lead to market confusion and dilution of brand exclusivity, potentially impacting the pricing power and overall brand desirability, which can influence net margins.
Concerns regarding the sustainability in demand, specifically related to electric and hybrid car residual values, could lead to decreased customer confidence and pressure on future sales revenues.
The observed trend of 81% of sales being attributed to existing customers raises questions about customer base diversity, which could limit revenue growth if this trend continues.
The ongoing supply chain challenges might impact production efficiency and lead to increased costs, posing a risk to net margins and earnings.
Changes in global economic conditions and potential tariff implementations could necessitate strategic pricing adjustments or impact market allocation, thus affecting revenues and profit margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $507.278 for Ferrari based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $597.04, and the most bearish reporting a price target of just $397.31.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €8.4 billion, earnings will come to €2.0 billion, and it would be trading on a PE ratio of 63.6x, assuming you use a discount rate of 15.8%.
Given the current share price of $449.56, the analyst price target of $507.28 is 11.4% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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