Ferrari (NYSE:RACE) Got ‘Back on Track’ After COVID-19

Ferrari (NYSE:RACE) Got ‘Back on Track’ After COVID-19

#Ferrari #Covid19

$RACE

Chaos and Crisis are the tests of leaders and reveal the true colors of organizations and societies at large.

Since the beginning of the China virus chaos we have seen different responses. But among those, the response from Ferrari, 1 of the world’s most recognized brands, and a powerful societal force in Italy was very revealing.

Just after COVID-19 caused an emergency in Italy, Ferrari’s leadership knew it needed to get the company and its employees back on their feet.

To do so, it launched “Back on Track” a program true to form with the racing reference.

It started as an initiative to reopen the factory safely while keeping staff healthy. Then the concept developed into an actual strategic plan with a call to action to all stakeholders involved.

The Mantra was to ensure the safest working conditions, the best operative and qualitative checks and emotional support: Teamwork; a program involving all employees at all levels, strengthening even further their sense of belonging to Ferrari.

Ferrari learned in early January 2020 from colleagues in Asia and Ferrari Greater China offices of the potential impact and disruption of COVID-19. Well before any government action was taken, the team could thus anticipate the need by working with experts, health professionals, virologists, and regional authorities to draw up a detailed plan of action. This preventative planning also allowed the company to provide emotional support for the entire staff, their families and partners in the ecosystem it shares. By combining the capacity to anticipate and the agility to quickly react with substance and structure, “Back on Track” was put in play.

Ferrari backed up its health initiative with a number of Key commitments including a substantial financial donation, a separate charitable initiative together with “Ferraristi” (Ferrari owners), and a matching program on charitable donations. It paid full salaries to all employees during this frame, there was no furloughing, no state subsidies, no reduction of holiday allowances. And, Ferrari’s CEO was in regular contact with employees, sharing with them the steps that were being taken, showing care and support, and listening to what they had to say.

Back on Track” became a strategic plan/program in line with a sense of purpose and a sense of belonging for the entire Ferrari team, fully consistent with the traditional values embraced by its dogmatic founder, Enzo Ferrari.

There are 7 factors that have an impact on a company’s reputation, they are as follows:

  1. Products and Services,
  2. Innovation,
  3. Workplace,
  4. Governance,
  5. Citizenship,
  6. Leadership and
  7. Performance.

RepTrack’s findings based on a survey conducted in Italy at the beginning and in the middle of the Covid19 crisis are revealing.

It found that ethical behavior is the #1 driver. The quality of products dropped from the 1st spot to become driver #2, and in 3rd came the emerging importance of leadership.

The reason why Ferrari kept its reputation value intact is that from January to April, it invested and prioritized helping and supporting the needs of the country, specifically on the health and safety needs arising due to COVID-19.

An ethical culture and strong leadership are Key to winning in the redefined reputation economy. And in all of this, ethical leadership will not be a ‘nice to have’, but rather a tangible asset that will enhance a company’s reputation, with a profound effect on the perceptions of consumers and potential employees. Being ethical not only the right thing; it will also be the only way forward.

Ferrari demonstrated with its “Back on Track” program how ethical leadership can be done right in a time of crisis. But as The Scuderia knows, in a race, it is not only about getting “back on track” immediately after a pit stop. It is also about keeping up a strong performance until the end of the race. I expect to see that with Ferrari in the race for leadership.

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 Bullish, the Key resistance is 184.34, Key support is at 178.57.

Our overall technical outlook is still Bullish, my long term Fibo number, a Key indicator is Very Bullish.

Ferrari finished Friday at 180.87, -3.73 in NY, and is trading at 185.09 pre-market in NY. It’s all time high was marked at 199.97 marked intraday Wednesday, 26 August.

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

Ferrari will continue to create value the long term as it becomes the world’s 1st Super Luxury brand.

Ferrari is a quality 1st long term luxury products investment, and I called it at it at 200+/share ATV (after the virus) and sided with BAML to 230 long term.

Thursday, 13 August I raised my long term target to 300, a Strong Bull call.

Ferrari has an average rating of “Buy” and an average target price at 194.33.

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 have called it at it at 200+/share long term, adjusting it to 200/share short term ATV and siding with BAML to 230 long term for now.

The stock is now considered defensive in the sector.

Have a healthy weekend, Keep the Faith!

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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 it 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.