Ferrari (NYSE:RACE) confirmed that it is at least considering adding IndyCar to its racing portfolio, using some of its F1 savings. It is one way the manufacturer can keep from sector layoffs that might come with the expected budget cuts necessary to get to the coming $145-M gross F1 budgets.
“Concern is not the word, it’s more a great challenge and also an opportunity,” Ferrari team Boss Mattia Binotto is quoted as saying in the online English version of the Italian media outlet Marca sports daily. “But we are not going to fire anyone. Perhaps not everyone will be in F1, but we will not rule anyone out.”
That is where IndyCar racing tie-up comes in as an option.
“It is true,” said a Ferrari spokesperson when contacted about a possible IndyCar effort. “We can confirm that one of the options we are considering is IndyCar. This is obviously following the budget cap, which might affect jobs here in Maranello. So it is an option.”
This past week, NTT IndyCar Series owner Roger Penske told Sirius XM Radio that the series is “looking at potentially adding other manufacturers. You’ve probably heard it, there have been discussions with Ferrari.“
Honda (NYSE:HMC) and Chevrolet (NYSE:GM) are the lone engine manufacturers in the series. Toyota (NYSE:TM) left Indy car racing in Y 2005.
“Ferrari might be interested in joining perhaps in 2022 when we have new engine rules,” Mr. Penske said. “That would be a great asset, to have a 3rd manufacturer in the series.
“Ferrari has shown public interest before and so we have sat down for a talk.“
Ferrari build an IndyCar in the 1980’s, the 637, but the car was never raced by The Scuderia as many believed it was a political play to persuade the FIA to change its F1 engine regulations.
Our overall technical outlook is Very Bullish in here, as all Key indicators are Very Bullish as it approaches its all time highs at 179.21 marked on 18 February 2020.
Ferrari (NYSE:RACE) finished Tuesday at 174.51, +1.91 in NY. Just off it’s all time highs.
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 (after the virus) and siding with BAML to 230 long term for now. The stock is now considered defensive in the sector.
Have a healthy day, Keep the Faith!
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