Key insights
- Morgan Stanley upgraded Ferrari (RACE) to Overweight, citing strong brand desirability despite a recent stock decline. Dealer checks in the US and Europe indicate no brand damage, but rather a temporary product-cycle mismatch. The firm believes market concerns about the EV launch and growth algorithm are overblown, viewing Ferrari's decision to slow volume growth positively due to its support for pricing power and residual values in the luxury sector. Recent Q1 earnings also surpassed expectations.
Investing.com - Morgan Stanley upgraded Ferrari NV (NYSE:RACE) from Equalweight to Overweight on Monday and raised its price target to EUR380.00 from EUR330.00.
The stock has fallen approximately 26% over the past 12 months, currently trading at $354.91, down from its 52-week high of $519.10. Fiscal year 2026-27 earnings per share revisions have been limited to approximately 4%. Morgan Stanley said the decline has been driven primarily by de-rating rather than earnings capitulation. According to InvestingPro analysis, the stock appears slightly overvalued at current levels, though the company maintains a premium P/E ratio of 34.16.
The firm said its dealer checks in the U.S. and Europe do not point to a damaged Ferrari brand. The checks suggest a temporary product-cycle mismatch, with parts of the current portfolio less perfectly aligned with what core clients want today, but with brand desirability still intact.
Demand remains strongest in special series, scarce allocations, Icona/supercar products and future collectibles, Morgan Stanley said. The firm said the market has moved too far in pricing concerns around the October 2025 capital markets day growth algorithm, hybrid residual values and the launch of Ferrari’s first electric vehicle, the Luce, as terminal brand risk.
Morgan Stanley said Ferrari’s decision to slow volume growth should be viewed positively. The firm said in luxury, scarcity supports pricing power, allocation discipline, residual values and the perception that access remains unique. InvestingPro subscribers have access to over 10 additional exclusive tips for RACE, plus comprehensive Pro Research Reports covering 1,400+ US equities.
In other recent news, Ferrari NV reported its first-quarter 2026 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $2.69, compared to the forecasted $2.37. The company’s revenue also exceeded predictions, reaching $2.14 billion against an anticipated $1.83 billion. These results represent a 13.5% positive surprise in EPS and a 16.94% surprise in revenue. Meanwhile, Ferrari is preparing to launch a gated manual version of its 12Cilindri model, as noted by Bernstein SocGen Group, which reiterated an Outperform rating and a $402.00 price target for the company.
Goldman Sachs attended the world premiere of Ferrari’s first fully electric and five-seater vehicle, the Luce, and subsequently raised its price target to EUR383.00, maintaining a Buy rating. Jefferies also reiterated a Buy rating with a EUR350.00 price target after the Luce unveiling. Analyst James Grzinic from Jefferies mentioned that the Luce aims to attract new customers, with feedback from the event being more positive than broader public reactions. These developments highlight Ferrari’s ongoing efforts to innovate and expand its product lineup.
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