“Ferrari racing fans around the world cannot wait to watch exciting wheel-to-wheel action between the world’s biggest manufacturers“– Paul Ebeling
Ferrari (NYSE:RACE) once was the last word in the world of endurance racing. But, Enzo Ferrari decided to step away from prototype sports car racing in the 1970s and focused on GT class sports car racing, of which Ferrari is a leading force.
But when the FIA announced that the current LMP1 category will be replaced with the LeMans Hypercar (LMH), the lights lit up at the Scuderia, seeing an opportunity for the Maranello Outfit to return to the Top of the World Endurance Championship.
Following Audi’s exit in Y 2016 and Porsche’s in Y 2017, the LMP1 category needed a revamp, with Toyota being the sole factory-backed participant in recent years. This led to the creation of the LMH and the LeMans Daytona Hybrid (LMDh) for participants with a smaller wallet for the Y 2023 calendar forward.
This drummed up lots of interest with major manufacturers around the world.
Acura, Audi and Porsche have confirmed entrances into the LMDh category. For the LMH category, Toyota, Peugeot, Glickenhaus and now Ferrari have confirmed their entrance, with Aston Martin postponing their plans to focus more on their F1 endeavors.
50 yrs after its last official participation in the premier class of the World Sports Car Championship in Y 1973, Ferrari’s involvement in the LMH category now adds significant legitimacy to the FIA’s efforts to reinvigorate the World Endurance Championship. The Maranello Outfit has a respectable record in the closed-wheel competition with 24 world titles and 36 victories at the 24 Hours of Le Mans.
Ferrari President John Elkann commented: “In over 70 years of racing, on tracks all over the world, we led our closed-wheel cars to victory by exploring cutting-edge technological solutions: innovations that arise from the track and make every road car produced in Maranello extraordinary. With the new Le Mans Hypercar program, Ferrari once again asserts its sporting commitment and determination to be a protagonist in the major global motorsport events.”
Ferrari is The Aristocrat of the automotive sector.
Our overall technical outlook is still Bullish, a Key indicators are Bullish long-term. Ferrari reported strong earnings for Q-3 on 3 November and did the same for Q-4 and F-Y 2020 as reported on 2 February.
Ferrari closed Thursday at 194.65 within its 52 wk range of 127.73 – 233.66 in NY. It’s all time high in NY was marked at 233.66 intraday on 29 December.
A Key technical indicator has turned Very Bullish. Ferrari’s stock is still very oversold in here, but the pattern still indicates the confirmation of the break out at 196.01 on 3 November and confirmed.
The Key support is strong at 191.48 and the Key resistance is at 195.48 at the close Thursday in NY.
Note: At the beginning of Y 2020 I called RACE at 230 by year’s end, the stock was trading at 165.22 on 1 January 2020, on 29 December 2020 it marked 233.66 intraday, its all time high
The Maranello Outfit’s shares were raised to Buy from Hold at HSBC, and Buys at Morgan Stanley and Bank of America.
UBS is now calling the stock at 365. Citi downgraded the stock from Neutral to sell. I have not seen any other Street downgrades.
Ferrari will continue to create value in the long term as it becomes the world’s 1st Super Luxury brand.
Ferrari is a quality 1st long term luxury products investment, BAML raised its call to 270 long term.
I have raised my long term target to 375, a Strong Bull call, the strongest on the Street and am holding the mark during this recent profit taking, and seeing RACE as a buying opportunity.
Ferrari has an average rating of Buy and a consensus target price at 243.60.
The Maranello Outfit’s shares were raised downgraded from Buy to Hold at HSBC Thursday.
Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I am calling it 375 long term, the Top on the Street, and adjusting it to 250/share short term.
A number of large investors have recently bought shares of RACE, and there have been very few stances of insider selling over the past yr that we have seen.
The stock is considered defensive in the sector.
Have a healthy day, Keep the Faith!