On Monday, Evercore ISI expressed confidence in Ferrari (NYSE:RACE)'s financial trajectory, raising the luxury carmaker's price target to $465 from $430 while maintaining an Outperform rating. The firm anticipates that Ferrari will meet its €2.5-2.7 billion EBITDA goal for the year, a milestone originally set for 2026, two years ahead of schedule.
Ferrari is expected to achieve approximately €2.56 billion in EBITDA for the current year. The firm's analysis suggests that there are several emerging factors that could contribute to a faster EBITDA growth rate in the coming year, with an estimated increase of 12.5% this year and an acceleration to 15% in the following year. This outlook contrasts with the consensus, which anticipates a slowdown in EBITDA growth.
Evercore ISI highlighted Ferrari's strategic position in the global luxury market, noting the brand's limited exposure to regions that may pose challenges. Ferrari's sales in China account for only 10% of its total sales, compared to the average of approximately 33% for most luxury brands. This differentiation is seen as a potential advantage for the company.
The firm also pointed out that Ferrari currently trades at a 17% discount compared to Hermès, suggesting that Ferrari's valuation could be on par with the top luxury peers. This valuation gap is seen as an opportunity, given Ferrari's positive financial outlook and unique market position.
InvestingPro Insights
Adding to the analysis by Evercore ISI, real-time data from InvestingPro paints a detailed financial picture of Ferrari (NYSE:RACE). With a robust market capitalization of $73.59 billion and a significant revenue growth of 17.17% over the last twelve months as of Q4 2023, Ferrari's financial health appears strong. The company's gross profit margin stands at an impressive 49.82%, indicating efficient operations and a strong pricing strategy.
InvestingPro Tips highlight Ferrari's financial prudence and investor appeal. The luxury carmaker boasts a perfect Piotroski Score of 9, reflecting high financial strength, and has raised its dividend for 3 consecutive years, showcasing commitment to shareholder returns. Furthermore, Ferrari's cash flows can sufficiently cover interest payments, and its liquid assets exceed short-term obligations, ensuring financial stability.
For readers interested in deeper financial analysis and additional insights, there are 19 more InvestingPro Tips available for Ferrari, which can be accessed through the dedicated InvestingPro platform. To enrich your investment strategy with these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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