TLDR
- Morgan Stanley raised Ferrari (RACE) from Equal Weight to Overweight, boosting the price target from €330 to €380
- Shares in Milan climbed 4.4% on Monday in response to the analyst upgrade
- Despite a 26% stock decline over twelve months, earnings forecasts dropped only about 4%
- Dealer surveys across the U.S. and Europe revealed no significant long-term brand erosion
- Wall Street’s average target price stands at €377.88, suggesting roughly 23% potential gains, with 23 Buy and 6 Hold ratings
Shares of Ferrari (RACE) advanced 4.4% during Milan trading hours on Monday after Morgan Stanley elevated the luxury carmaker to Overweight from Equal Weight, simultaneously pushing its price objective to €380 from €330 — indicating approximately 24% potential appreciation from Friday’s closing level.
The positive call arrives after a challenging period for shareholders. The Italian automaker’s shares have declined roughly 26% throughout the past year, while Wall Street’s consensus earnings projections for 2026-27 have been reduced by merely 4% during the identical timeframe.
Morgan Stanley characterized this divergence as a significant disconnect. The research team, headed by Edouard Aubin, noted the decline “has been driven partly by negative earnings revisions, but primarily by multiple compression.”
Essentially, the market has been devaluing the equity at a rate that appears disproportionate to the underlying earnings trajectory.
The factors driving that revaluation had merit. Market participants grew concerned following Ferrari’s October 2025 capital markets presentation revealing a more conservative expansion timeline, declining residual values for hybrid offerings including the 296 and SF90, and ambiguity surrounding the Luce — the company’s inaugural fully-electric model.
Morgan Stanley conducted ground-level research. Conversations with dealership representatives across the U.S. and European markets returned predominantly positive signals.
Residual Values Appear to Be Stabilising
Secondary market pricing emerged as the critical variable for equity performance. Intelligence gathered from dealers indicated the 296 GTB is trading at or close to底levels, with transactional volume increasing. SF90 Coupe and Spider valuations also seem to be finding support following substantial adjustments.
The research team believes the deterioration has likely reached its nadir.
Regarding the Luce, dealer sentiment ranged from lukewarm to pessimistic in the immediate term. Concerns centered on styling choices, the €550,000 Italian launch pricing, and ambiguity regarding the intended customer profile.
However, Morgan Stanley contends the subdued response is already reflected in current valuations. The firm emphasized that Ferrari’s production discipline “can limit any brand damage while leaving option value with new clients.”
The investment bank also observed that Ferrari’s electrification strategy has reignited enthusiast demand for vintage combustion-engine models, which it views as beneficial for overall secondary market stability.
K-Shaped Economy Seen as a Tailwind
Morgan Stanley highlighted Ferrari’s concentration among ultra-high-net-worth clientele as a fundamental competitive advantage. Real estate advisory firm Knight Frank forecasts the worldwide UHNWI population will expand by approximately 235,000 individuals between 2026 and 2031, with the United States representing about 58% of that growth.
The firm reduced its weighted average cost of capital assumption to 7.5% from 8.1%, signaling increased conviction in Ferrari’s demand resilience. Earnings projections for fiscal years 2027-30 were lifted by roughly 2% on average.
Among 29 analysts covering the stock, the consensus recommendation remains Buy, comprising 23 Buy ratings and 6 Hold ratings. The mean 12-month price objective currently registers at €377.88, suggesting around 23% upside potential from the June 12 closing price.
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