Ferrari’s stock has fully recovered from the market selloff that was caused by C-19 coronavirus chaos, and I expect the iconic Italian super carmaker continue its growth into Y 2021.
Ferrari has enough liquidity to withstand the virus epidemic, and by keeping the supply of cars limited, it is able to leverage its pricing power and decrease its Southside during economic downturns, making it the defensive stock in the automotive sector, it is the Aristocrat carmaker.
While Ferrari expects its adjusted EBITDA for the year to dip 5% to 17% Y-Y, those expectations already priced in.
We are long Ferrari since 16 July 2016 at 42/share. Currently Ferrari ist trading at 181.31 pre-market Wednesday, it’s all time highs.
The company has no plans to cut its dividends, and as the F1 revenue is expected to recover in Y 2021, there’s no reason not to be Very Bullish Ferrari.
Our overall technical outlook is Bullish in here, as all Key indicators are Very Bullish.
Ferrari finished at 180.85, +0.06 Tuesday in NY, just shy of its intra-day all time highs at 183.05 marked on 21 July 2020.
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. The stock is now considered defensive in the sector.
Have a healthy day, Keep the Faith!