There is no question that the C-19 coronavirus chaos has ripped its way through almost every aspect of life as we knew it in February. Even Supercar manufacturing was not immune to the effects of the medical emergency that swept the planet. Exclusive automakers the world shut down operations, including Ferrari (NYSE:RACE).
But, things have turned and Ferrari resumed production Wednesday and will be in full production Friday, 8 May, after halting its production since mid-March.
JPMorgan calls Ferrari (NYSE:RACE) 1of its most defensive* stocks in its coverage universe after reviewing the iconic Italian luxury carmaker’s Q-1 earnings report.
The firm notes Ferrari lost a very small number of its sales in Q-1 of Y 2020 Vs the industry average of -21%.
The F1 budget issues and valuation keeps JP on the sidelines with a Neutral rating, but with a constructive stance.
“We value RACE shares at 24.0X 2020 E EBIT, a premium to the Europe luxury goods average multiples, in part reflecting Ferrari’s strong sales resiliency,” JPM said in a note to its clients.
*A defensive stock is a stock that provides consistent dividends and stable earnings regardless of the state of the overall stock market. There is a constant demand for their products, so defensive stocks tend to be more stable during the various phases of the business cycle
Our overall technical outlook is Nutral to Bullish in here
Ferrari finished Wednesday at 155.07, -0.34 in NY.
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.
Have a healthy day, Keep the Faith!