On Friday, Barclays (LON:BARC) made a bullish move on Ferrari NV (NYSE:RACE:IM) (NYSE: RACE), upgrading the luxury carmaker's stock from Equalweight to Overweight and increasing the price target to EUR450.00, up from EUR400.00. The upgrade comes with an optimistic outlook towards the company's future, anticipating increased market focus on its 2025 prospects.
The bank's decision to upgrade Ferrari's stock follows a period of neutrality, as the analyst described the previous stance as being "deliberately on the sidelines" since the downgrade prior to the company's first-quarter earnings.
The new EUR450.00 price target represents a shift in valuation methodology, balancing the 2024 and 2025 estimates, which signals confidence in the company's performance in the coming years.
Barclays' revised price target is based on a sum-of-the-parts (SOTP) valuation, now incorporating a 50/50 split between the fiscal years 2024 and 2025 estimates.
This adjustment allows Barclays to maintain the price target within a 10% average target multiple premium to Hermes, a luxury goods competitor, without exceeding it.
The analyst emphasizes that the strong performance in the first half of the year has reduced risks for the 2024 consensus estimates, bolstering confidence in Ferrari's ability to outperform market expectations in 2025 and 2026.
The upgrade and new price target reflect Barclays' view that the market will soon begin to align with their perspective, recognizing the strength of Ferrari's longer-term financial forecasts.
The bank's analysis suggests that the current 12-month forward price-to-earnings ratio for Ferrari, which is at a 10% premium to Hermes, is justified given the de-risked outlook for 2024 and the above-consensus expectations for the following years.
In conclusion, Barclays anticipates that investors will increasingly consider Ferrari's potential for 2025 and beyond, as the company continues to demonstrate robust financial performance. The upgrade to Overweight and the raised price target to EUR450.00 underscore the bank's positive view on Ferrari's stock for the near future.
In other recent news, Ferrari N.V. has reported a considerable increase in its second quarter revenues for 2024, marking a 16% year-over-year rise to €1.7 billion. The company's net profits also saw a significant boost, reaching €413 million.
These positive results led Ferrari to upgrade its full-year guidance, citing a surge in customized orders and a solid order book extending through 2026.
Barclays, in a recent move, upgraded Ferrari's stock from Equalweight to Overweight and increased the price target to EUR450.00. The bank's decision was based on the company's strong performance and a confident outlook for the coming years.
Ferrari also announced plans to launch an electric vehicle by the fourth quarter of 2025, demonstrating its commitment to innovation and customer choice. These recent developments reflect Ferrari's robust financial performance and its potential for future growth.
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