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Sunday, July 25, 2021

Ferrari (NYSE:RACE) Will Not Cap Production at 10,000 Supercars


Since it was floated on the NYSE in October 2015, Ferrari (NYSE:RACE) has seen its shares rise from an opening price of 52 to a 52 wk high at 176.58 closing Monday at 167.55 in NY.

The Maranello Outfit is making major efforts to please investors, including ramping up production and expanding into new, more mainstream segments. Including its FUV the Purosangue due in Y 2021.

After years of limiting annual production to 7,000 units under the reign of Chairman Luca di Montezemolo, his successor Sergio Marchionne and now current Chairman John Elkann have expanded production. And Ferrari is now selling more than 10,000 cars per year for the 1st time.

The iconic Italian company last Tuesday announced sales for Y 2019 came in at 10,131 units, up 9.5% on the prior year. All those cars resulted in EUR 4.1-B (approximately $4.5-B) in revenue and a profit of 917-M EUR (EBIT).

But Ferrari will not cap production at 10,000 units. The FUV could become one of the company’s most popular models, and there’s also a LaFerrari successor in the works.

Ferrari has to face much stricter emissions regulations now that it is selling more than 10,000 cars, which is the limit regulators in Europe allow automakers to escape the stricter rules.

As a result, Ferrari plans to introduce more hybrids. The company has just launched the plug-in hybrid SF90 Stradale and is targeting a 60% electrified lineup by Y 2022. The company is also looking into more alternatives, such as using hydrogen or bio-fuels.

Ferrari makes efforts to protect exclusivity by limiting sales in established markets. For instance, Ferrari’s sales in Y 2019 were actually down 3.3% in the Americas, due to what the company describes as a “deliberate geographical rebalancing.”

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, there is resistance at 169.07, and Key support is solid at 164.19, the stock has established strong long term support. The MACD is Very Bullish in here

Ferrari finished at 167.55 + 0.79 Monday in NY.

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 and siding with BAML to 230 long term for now.

Have a terrific week

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