Ferrari (RACE): Is the Recent Share Price Cool-Down Creating a Valuation Opportunity?

Ferrari (RACE) shares have cooled off recently, slipping over the past month and more sharply in the past 3 months, which naturally raises the question: is this just a pit stop or something deeper?

See our latest analysis for Ferrari.

Viewed over a longer track, that recent pullback sits against a still powerful backdrop, with Ferrari’s three year total shareholder return of 80.4% showing long term momentum even as near term share price performance cools.

If that kind of history has you wondering what else might be revving up, this could be a good moment to explore other auto manufacturers on Simply Wall St.

With shares still well above pre rally levels and analysts seeing some upside from here, the key question now is whether Ferrari’s recent dip signals a fresh buying opportunity or if the market has already priced in its future growth.

Most Popular Narrative: 17.8% Undervalued

With Ferrari last closing at $372.65 against a narrative fair value near $453, the story focuses on how far its luxury engine can still run.

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.

Read the complete narrative.

Want to see what justifies paying a luxury multiple for an automaker? The narrative leans on rising margins, steady growth and a bold future earnings power story. Curious which profit and revenue assumptions power that jump in fair value, and how rich the implied earnings multiple really is? Read on to unpack the full playbook behind this valuation.

Result: Fair Value of $453.42 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, an aggressive new model cadence and lingering supply chain pressures could strain Ferrari’s exclusivity and margins, challenging the premium multiple behind this valuation.

Find out about the key risks to this Ferrari narrative.

Another Angle on Value

Those narrative fair value estimates lean bullish, but the earnings multiple tells a tougher story. Ferrari trades on a price to earnings ratio of about 35 times, versus roughly 18 times for the global auto industry and a fair ratio of 17 times, implying meaningful valuation risk if sentiment cools.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Ferrari Narrative

If you see the story differently or want to test your own assumptions against the numbers, you can build a complete narrative in minutes: Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Ferrari.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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