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Ferrari (NYSE:RACE) Is Not Just About Supercar Sales

#Ferrari

$RACE

“Win on Sunday, sell on Monday has been the most famous mantras for why automobile manufacturers get involved in motorsports, but things have changed and Ferrari is on Top of that curve” — Paul Ebeling

Now building a successful brand is not about getting F1’s fans to immediately dig into their pockets and buy reall expensive road cars the morning after you stand on Top of the podium.

At Ferrari (NYSE:RACE) is now about getting fans to wear the Prancing Horse logo on T-shirts, play their racing cars on computer games, ride on rollercoasters at its theme parks and put their posters on their bedroom and garage walls.

Yes, it is about engagement, loyalty and openness, all factors that cannot be simply judged by the number of wkly new car sales.

Why? Because at Ferrari you cannot buy a new 1 unless the Maranello Outfit blesses and vets you, that no matter how much money you may have. Ferrari will not even sell it employees a new 1, the exceptions being C-Suite executives and its F1 drivers.

Notably, if Ferrari marketing likes you, and you do not have all of the money they will finance your purchase.

Ferrari, the world’s most prestigious car maker does not sit back and focus on the core demographic who buy their Supercars. Ferrari goes after fans and sell them Ferrari stuff. Because it fully understands the value of making its company more open to everyone and that includes the younger market.

For Ferrari, the value is clear in having as many people as possible living and breathing the brand: and what better way to get youngsters behind the wheel than in computer games, in this case simulated racing.

For yrs now, that is why Ferrari has licensed its cars for use in computer games such as Gran Turismo and Assetto Corsa and last year it ramped up its involvement by launching an official Esports Series.

And in Y 2018 it signed an exclusive deal with Georgio Armani to redesign all of the Ferrari stuff it sells in its 22 Ferrari stores and 2 theme parks around the world.

Ferrari wants to invite everyone into it iconic world, as it is a super brand with an unmatched and iconic automotive history and wants that history to continue, hence the invitation to people to enter into its world.

Simply put, Nicola Boeri, Ferrari’s Chief brand diversification officer, says, “It is not just about the car business.

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 at 197.06 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 196.76 and the Key resistance is at 210.84 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 have been very few instances of insider selling over the past yr that we have seen.

The stock is considered defensive in the sector.

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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