Copyright Barchart
Luxury has many faces, but when it comes to timeless prestige, speed, and craftsmanship, Ferrari (RACE) stands in a league of its own. The Italian icon is more than just a carmaker. It’s that rare mix of power, prestige, and pure exclusivity that turns every model into a status symbol. Lately, Ferrari has been steering carefully through a shifting luxury landscape, doubling down on its scarcity-driven strategy and introducing new models aimed at high-net-worth (HNW) buyers while preparing its first electric Ferrari — a bold nod to the future. Yet, even legends hit bumps. RACE stock dropped about 15% on Oct. 9 after its Capital Markets Day, announcing 2030 revenue guidance of €9 billion, which fell short of Wall Street’s expectations. The market reacted sharply, interpreting the cautious tone as a slowdown in Ferrari’s growth story. Recently, UBS cut its target from $579 to $529 but kept a “Buy” rating, arguing that Ferrari’s discipline and long-term vision remain unmatched. Despite near-term weakness, UBS calls it “one of the most compelling long-term growth stories” in the luxury world — proof that true craftsmanship takes the long road. Let’s take a closer look at RACE stock now. About Ferrari Headquartered in Maranello, Italy, Ferrari has evolved from a racing dream into the pinnacle of automotive artistry. Beyond crafting sports cars and supercars, Ferrari has built a world of passion, spanning museums, theme parks, fine dining, and luxury merchandise. Driven by innovation, Ferrari also blends craftsmanship with cutting-edge technology. Ferrari’s market capitalization currently stands at around $100 billion. Shares of RACE have been revving with short bursts of energy lately, up 2% over the past five days, but the road has been rougher over the longer haul. RACE is still down about 16% over the past month and remains roughly 20% off its July peak of $519.10, which is also its all-time high. Over the past 52 weeks, the stock has declined 9%, reflecting a mix of investor caution and market volatility. Volume cooled to below 1 million shares after spiking to a year-to-date (YTD) high of 4.87 million on Oct. 9. While the 14-day RSI dipped into oversold territory, it has been turning upward from that zone recently, signaling that bullish momentum is starting to build and a potential rebound could be underway. In valuation terms, RACE stock does not come cheap. Shares trade at about 39.5 times forward adjusted earnings and 13.6 times forward sales, a clear premium to most luxury and auto peers. Yet, for a brand that thrives on scarcity, exclusivity extends even to its stock. Interestingly, RACE now trades at a discount to its own historical averages. And with both revenue and earnings expected to pick up speed over the next few quarters, that premium could soon look well-earned. For long-term investors, this may be one of those rare moments when Ferrari offers a seat at a reasonable price — before it takes off again. Ferrari’s Q2 Earnings Snapshot Ferrari’s second-quarter 2025 results rolled in on July 31, and the market reaction was anything but smooth. Shares skidded 11% after the company posted mixed numbers. Revenue came in at €1.79 billion ($2.08 billion), just shy of forecasts, though still up 4.4% year-over-year (YOY). Earnings told a better story — adjusted EPS of €2.38 rose 3.9% from last year, topping Wall Street estimates. It was another quarter where Ferrari proved that even when expectations run high, it can still outrun the pack. Ferrari’s adjusted EBITDA hit €709 million ($826 million) with a robust 39.7% margin, while EBIT stood at €552 million ($643 million), translating to a 30.9% margin. The company delivered 3,494 vehicles during the period. Cash generation roared ahead, too, with industrial free cash flow (FCF) jumping 90.7% YOY to €232 million ($270.3 million), supported by a cash cushion of €1.5 billion ($1.8 billion). Looking ahead, management recently raised its full-year 2025 guidance with confidence. The firm is targeting revenue above €7.1 billion ($8.27 billion), adjusted EBITDA over €2.72 billion ($3.16 billion), and adjusted EPS topping €8.80. Meanwhile, industrial FCF is projected to exceed €1.3 billion ($1.5 billion). Ferrari is doubling down on financial discipline and electrification plans, with new models designed to broaden its appeal without diluting exclusivity. Thanks to easing U.S. tariff pressures and tight execution, the firm is keeping its long-term vision in clear focus. Even with a bumpy quarter, Ferrari is simply shifting gears for the next leg of the race. At its Capital Markets Day, Ferrari laid out an ambitious 2030 roadmap built on precision and profitability. The company aims for net revenues of about €9 billion, growing at a 5% compound annual growth rate (CAGR), powered by sports cars, personalizations, and an enriched product mix. Racing and lifestyle segments will also boost performance. Ferrari is targeting adjusted EBIT of at least €2.75 billion with a 30% margin and adjusted EBITDA of €3.6 billion with a 40% margin. Backed by strong demand visibility and disciplined execution, the automaker expects industrial FCF above €8 billion from 2026 to 2030, with cash conversion exceeding 50%, a testament to its enduring financial horsepower. Ferrari plans to reward loyal shareholders in true luxury fashion, boosting its dividend payout to 40% of adjusted net profit starting with 2025 results, aiming to return around €3.5 billion from 2027 to 2031. On top of that, a fresh €3.5 billion share buyback program kicks off in 2026, fueled by strong cash flow and confidence in the brand’s enduring momentum. Looking forward to fiscal 2025, the bottom line is expected to rise by 12% YOY to $10.26 per share, before rising by another 14% annually to $11.72 per share in fiscal 2026. What Do Analysts Expect for Ferrari Stock? UBS recently lowered its price targert on RACE stock from $579 to $529, yet maintained a “Buy” rating, signaling that short-term volatility does not shake confidence in the brand’s long-term potential. Analyst Zuzanna Pusz pointed out that the double-digit stock drop reflects market concern over Ferrari’s cautious 2030 guidance rather than a fundamental change in its growth story. Pusz highlighted Ferrari’s disciplined, scarcity-driven strategy, careful pricing, and focus on HNW clients as protective measures for brand value. The analyst also sees promise in Ferrari’s expansion into broader markets through new launches and its first electric model, which could attract a wider customer base. Despite limited near-term catalysts, the brokerage firm calls Ferrari one of the most compelling long-term growth stories in luxury autos, with potential upside if global market conditions stabilize and demand for exclusive, high-end vehicles remains strong. Overall, analysts are optimistic about the luxury auto stock with a dash of caution, giving RACE stock a consensus rating of “Moderate Buy." Out of the 16 analysts covering the stock, nine have a “Strong Buy,” two advise a “Moderate Buy,” three analysts have a “Hold” rating, one has a “Moderate Sell,” and one has a “Strong Sell" rating. The average analyst price target for RACE is $487.18, indicating potential upside of 18%. The Street-high target price of $554 suggests that the stock could rise as much as 34% from here.
