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F1: Budget cap has greater impact on Ferrari (NYSE:RACE) than MBZAMG and Red Bull Racing

#F1 #Ferrari #BudgetCap #MBZAMG #RedBullRacing

$RACE

Ferrari (NYSE:RACE) would have liked to have had a more time to adjust the size of The Scuderia to the new budget limit of $145-M. They would have preferred to transfer the people who are no longer able to work on the racing team instead of firing them, but that would have taken time, especially in Italy.

That is because labour legislation in Italy is less flexible than in Great Britain, explained Franco Nugnes of Motorsport.com“There are therefore complications that make this process more complicated for Ferrari than for Mercedes and Red Bull.” 

Ferrari is trying to keep their manpower with different strategies including placing important figures with other teams.

For example, Simone Resta is the new technical director at Haas and Jock Clear who will be taking care of all the drivers in the junior program at the Ferrari Driver Academy.

Finally, there are plans to reduce salaries in order to keep as many people as possible employed. Something that entails the risk that their best people will look for a better-paid job.

In any case, it remains difficult for Ferrari to dismiss people just like that.

“The drastic cost reduction adopted last year as a result of the COVID-19 pandemic is having a greater impact on Ferrari, which has to deal with an Italian law that is much more bureaucratic than the British, where contractual tires have always been looser and above all more flexible,” added Mr. Nugnes.

Ferrari is The Aristocrat of the automotive sector.

Enzo Ferrari’s iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos

HeffX-LTN overall technical outlook for RACE is overall Very Bullish, the Key resistance is at, the Key support is at .

Our overall technical outlook is Very Bullish, a Key indicators are Bullish long-term. Ferrari reported strong earnings for Q-3 on 3 November.

Ferrari finished trading Thursday at 229.52, -0.17 against it 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.

All technical indicators are Very Bullish the Key support is at 214.84, the Key resistance is 233.59. Ferrari’s stock is extremely oversold in here, and the pattern indicates that all of the year end profit taking is over.

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, it all time high

The Maranello Outfit’s shares were raised to Buy from Hold at HSBC, Morgan Stanley and Bank of America. UBS is now calling the stock at 365. Citi downgraded the stock from Buy to Neutral Thursday. 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 the profit taking this week. Seeing RACE as a buying opportunity.

Ferrari has an average rating of Buy and a consensus target price at 219.80.

The Maranello Outfit’s shares were raised to Buy from Hold at HSBC.

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 230/share short term.

A number of large investors have recently bought shares of RACE, and there is no insider selling.

The stock is now considered defensive in the sector.

Have a healthy weekend, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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