Morgan Stanley’s Adam Jonas on Ferrari (NYSE:RACE)
“Ferrari (NYSE:RACE) remains one of our very highest conviction long ideas in US autos.” Adam Jonas
“Ferrari may be the lowest risk business in both cyclical and secular terms of any company under Morgan Stanley’s NA coverage ….
Ferrari’s business composition leaves it very shielded to a variety of market and industry risks. Wait lists are designed to be long, suggesting its products are designed to have demand significantly exceed supply.
This phenomenon is expressed in the 2nd-hand (pre-owned) market where examples of both old and nearly new Ferraris frequently exceed there list price when new.
Exposure to China is by far lower than any other premium auto brand we cover, comprising at or under 10% of sales.
On the secular side, the now widespread consideration of forthcoming autonomous cars has elevated risk to those involved in producing cars as a means of transportation.
A Ferrari is not transportation.
Ownership is an exclusive club and membership requires more than just money. In a world where pleasurable human driving experiences on an open road become increasingly scarce, the value of this exclusive automobile club’s membership may indeed appreciate.”
Friends, I quoted Mr. Jonas at length here because he nailed what makes Ferrari so special. There’s a reason why it is one of the most important brands in the world, and why the automaker’s stock has been bucking a Wall Street trend, with other car companies seeing their shares stall and/or decline.
In fact, Mr. Jonas is now sounding more enthusiastic about Ferrari than Tesla, a company he was Bullish on, but ha recently been trimming back his enthusiasm for.
|NYSE:RACE||53.47||16 November 2016||-0.62||53.15||53.93||53.13||448,986|
|HeffX-LTN Analysis for Ferrari:||Overall||Short||Intermediate||Long|
|Bullish (0.33)||Neutral (0.23)||Very Bullish (0.50)||Bullish (0.26)|