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Sunday, September 19, 2021
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Ferrari (NYSE:RACE) ‘Breeder’ of Champions

#Ferrari

$RACE

By Vincenzo Borgomeo

Paul Ebeling, Editor

This is the heart and soul of Ferrari, the place where Supercars are born and bred”— Paul Ebeling

Ferrari’s (NYSE:RACE) historic Maranello HQs looks much like a typical farmstead building in Emilia-Romagna. That’s how Enzo Ferrari was obliged to build it during the 2nd World War, because of the limited materials available in the early 1940’s.

Since then, a hi-tech Supercar factory, featuring cutting edge architecture, has grown up within it. And to this day all new Ferrari cars pass through that historic entrance from which the legendary 125S 1st emerged in 1947 pictured above.

There is something magical about passing through the gates at Via Abetone Inferiore 4 in Maranello: the Ferrari factory, the historic home to the brand, the icon itself  of the Prancing Horse, with a long, low, ochre-yellow building and brick-red-plastered entranceway.

It is halfway between a great Po-valley farmhouse and English-style workshop, with an even more rustic feel owing to its location amid vine rows and orchards.

From the outside, it is hard to imagine that championship racing cars and the world’s most sought-after Supercars emerge from these historic premises, given their appearance.

But this contrast is exactly what gives the Ferrari entrance its magic: the gate appears more like a space-time portal, than a security system to keep curious onlookers away.

But this is not a fantasy/adventure narrative device, because what you see at Via Abetone Inferiors 4 is what you get: a historic farm entrance. But beyond the gate you enter the world’s most hi-tech motorcar factory.

This all has a thoroughly historical explanation. After WWII, it was on this road that the Ferrari factory occupied a Fondo Cavani plot property of approximately 17,000 sqm.

Historical documents show that the Mayor of Maranello granted Enzo Ferrari permission to purchase and renovate a “large metal shed” for Auto Avio Costruzioni – Scuderia Ferrari on 4 December 1942.

In fact, the renovation consisted merely of dismantling the iron structures that were to have been given over to the nation at war and rebuilding, with an explicit prohibition on using reinforced concrete and iron.

This is why Enzo Ferrari adopted ancient building techniques like brick walls and timber roof trusses. This method naturally determined the form of the building itself and its peculiar architecture, with an irregular courtyard, with long brick wings, made of ochre-yellow-plastered bricks, and double-pitched roofs.

Nor is it a coincidence that paths still run through Ferrari’s buildings today, connecting both horizontally and vertically the various areas to facilitate the continuous exchange of information between the interdepartmental project teams and permit monitoring of all stages in the product cycle at first hand.

This is a charming, striking and magical structure, also in terms of its outer appearance, because the large facades, which do not provide separation but transparency, completely encompass the building, making working life visible to the world of the surrounding factory. They remind us that a superior tech product always results from the unbroken collaboration of all systems that contribute to its conception and production.

But there is a detail which is worth more than a thousand speeches in getting across the continuity of image and strategy: all Ferraris, from the 1st 125S to the Roma, came out from the brick entrance at Via Abetone Inferiore 4, witnessing to a spectacular, historic image from the time.

In 1947, the 125S emerged from Ferrari like a chick from its nest. And the brand was to cover a huge amount of ground when it began to fly…

Editor’s Note: I remember like yesterday the 1st time I was escorted into that magical space by its Managing Director, ‘artists‘ were casting aluminum engine blocks in sand, and pounding out aluminum body panels with sand bags on olive wood stump forms…

Take a tour of the Ferrari factory today

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

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 Friday 188.90 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 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 at 184.33 and the Key resistance is at 193.94 at the close Friday 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 has been just 1 instance of insider selling over the past yr that we have seen.

The stock is considered defensive in the sector.

Today, Ferrari is 1 of the Top 5 most reputable companies in the world, with Microsoft, Rolex, Disney and Lego.

Ferrari has in the last 80 yrs, the pinnacle of sports cars, is famous for competing in various races held across the world, including Le Mans and the Formula One championship, where it has achieved considerable success. If someone owns a Ferrari, they are automatically thought to be a symbol of wealth, luxury and class. In fact, in Y 2014, Ferrari was rated as the most powerful brand in the world by Brand Finance, before later being overtaken by Lego. Just so you have an idea of the prestige that Ferrari brings, a 1963 250 GTO was sold in a private transaction for $72-M in Y 2018, which is more than a very luxurious private jet costs.

Have a healthy week, 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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