Home 2022 Ferrari (NYSE:RACE) is Undervalued, EVs Not Priced In

Ferrari (NYSE:RACE) is Undervalued, EVs Not Priced In

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#Ferrari #EV

$RACE $MS

Ferrari was called a Top pick in the auto sector by Morgan Stanley once again after the iconic Supercar maker posted a strong Q-4. The all-time record high order book is said to support the view that more than 100% of the company’s share price can be justified with the core ICE car business, offering significant upside from EVs at a Zero or negative implied price.

Analyst Adam Jonas and team also like the long-term setup on Ferrari: “We see scope for Ferrari to offer a range of EV products at potentially higher prices than the average selling price of today’s Ferrari, while leveraging economies of scale on higher volumes.

Ferrari is forecast to achieve a 7.4% CAGR in volume through FY 2030 and a 6.4% CAGR through FY 2040 as the EV market is said to open the aperture for the total addressable market and growth.

Morgan Stanley assigned a price target of $350 to RACE Vs the average analyst price target of $214.07.

Ferrari is The Aristocrat of the automotive sector.

Ferrari is 1 of the most recognizable brands in the world, even becoming the world’s strongest luxury brand in Y 2021, according to Brand Finance. Its Brand Strength Index scored 93.9 pts out of 100 and has a brand strength of AAA+.

Our overall technical outlook is still Bullish, all 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 is trading pre-market Friday at 331.60 within its 52 wk range of 127.73 – 275.30 in NY, down from its all time closing high at 275.30 on 22nd November.

Key technical indicators are Neutral with a Bullish bias in here. The candlestick pattern indicated the confirmation of the break out at 196.01 on 3 November and confirmed.

The Key resistance is at 231.99, the Key support is at 223.54, our Key technical indicator is Neutral.

Societe Generale places a Street high price target of $290 on RACE as compared to the average sell-side price target at 195.93. Most Street analysts still do not know how to view Ferrari.

Morgan Stanley called out $RACE a “sleeper” EV play as the firm can justify more than 100% of the company’s value with its ICE business. MS’s new price target of $350 reps more than 35% Northside potential for shares and is above the average analyst 1 yr target is at 214.07.

MS automotive analyst says, “Longer term, we see scope for Ferrari to offer a range of EV products at potentially higher prices than the average selling price of today’s Ferrari, while leveraging economies of scale on higher volumes.

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, an 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. 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 208.29.

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 call on the Street, and adjusting it to 250/share short term.

A number of large investors have recently bought shares of RACE, and Ferrari continues to buy back its stock in here.

The stock is considered defensive in the sector.

Have a prosperous day, Keep the Faith!

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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.