Ferrari (NYSE:RACE) The Business of Formula One Racing

Ferrari (NYSE:RACE) The Business of Formula One Racing

$RACE

Ferrari (NYSE:RACE) has competed in more than 900 Grands Prix races and remain the only constructor to have taken part in every single edition of the Formula 1 World Championship since its launch. The Scuderia hold 15 Drivers titles and 15 Constructors titles.

The Maranello Outfit builds racing and road cars, symbols of Italian excellence the world over, and it does to win. The cars are unique creations that drive the legend and generate a “World of Dreams and Emotions”.

The fascination with Ferrari is like no other carmaker or F1 team: F1 is a hugely expensive and combustible business and the list of names that have come and gone is long.

Ferrari prevails.

This has given The Scuderia huge bragging rights, plus political leverage with the Mororsport.

Under the terms of the current Concorde Agreement, the contract that F1 teams have with the sport’s governing body, the FIA, and that dictates how the TV revenues and prize money are distributed, Ferrari gets more, $100-M more.

The argument goes this way: Ferrari, a name that even unidentified tribes in the Amazon rain-forest will have heard of, has the biggest global fan-base and brings incalculable extra value to the sport, more than any of its rivals.

The Concorde Agreement is currently being renegotiated for Y 2020, and F1’s owner, Liberty Media, wants to “reframe” it.

Ferrari’s posture the message went, “…is bigger than anyone or anything else including Formula One.”

Enzo Ferrari, the founder of the company and self-styled “agitator of men“, was a genius at manipulating people and even in his Golden years traded heavily on Ferrari’s impregnable mystique and glamour.

Following his death in Y 1988, there was a gap in the management of the company. It was 3 years before the boss, Gianni Agnelli, anointed Luca di Montezemolo as Ferrari’s CEO, in November 1991, and while he turned the misfiring car-making business around quickly, it was 9 years before Michael Schumacher lifted the driver’s world championship in Y 2000 – 21 years since The Scuderia’s last.

Ferrari finds itself once again embroiled in the sort of energetic internal politics that would make the Medicis take note.

This drama is 1 of the things long-term observers of Ferrari find very compelling. Enzo Ferrari’s shoes are not easy to fill, but there are people keen to try them on for a fit.

Following an IPO in October 2015, Ferrari is currently valued at $27-B. Ferrari’s current CEO is former Philip Morris International Chairman Louis Camilleri. And under his rule the company has prospered as never before albeit it is struggling with its F1 efforts this season.

Meanwhile, Mick Schumacher, Michael’s son, has joined Ferrari’s Driver Academy and is contesting F1’s feeder championship F2 this year. If he goes well and so far it is, see him joining Sauber-Alfa Romeo in Y 2020 in F1 and then into Ferrari in perhaps Y 2021. The contracts are set through Y 2020, so no changes yet, stay tuned…

This is the Official Ferrari YouTube link up

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 Neutral to Bullish, overhead resistance is at 160.24, and support at 154.42, all Key indicators are flashing Bullish to Very Bullish in here. Ferrari finished at 156.07, +0.75 Friday in NY.

Note: Goldman Sachs upgraded Ferrari to ‘buy‘ from ‘neutral ‘calling the stock’s pullback a good “entry point.” “We upgrade Ferrari from Neutral to Buy, offering 15% upside to our new price targets of 182. Our thesis, outlined in Life of Luxury published last month, is fundamentally unchanged post Ferrari’s in-line 2-Q results. We view the stock’s recent pullback (-7% since July 16) as a good entry point in here.

Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term investment, and I see it at 200/share in that frame.

Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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