Analysts' confidence in Ferrari is at a five-year high. How is the group similar to Hermès?

Analysts have increased their support for Ferrari: the number of "buy" recommendations for its shares has reached a maximum since 2020. Experts consider the manufacturer of the iconic Testarossa an attractive long-term investment due to the prestige of the brand, high customer loyalty and a large order queue. According to their forecasts, real demand exceeds current production volumes by two to three times, and profits are capable of growing at double-digit rates over the next five years.

On September 16, three analysts expressed optimism about Italian supercar maker Ferrari. Mediobanca team raised its outlook on the stock from neutral to "above market", which is equivalent to a "buy" recommendation. Berenberg analysts, in turn, began coverage of Ferrari immediately with a "buy" recommendation, Bloomberg writes. And Bernstein analyst Steven Reitman reiterated his previous "buy" recommendation on the company's shares, noting them as an attractive opportunity for investors.

More than two-thirds of analysts tracked by Bloomberg now recommend buying Ferrari shares or give equivalent estimates. That's the highest optimism rate since October 2020, the agency notes.

Berenberg's target price of 484 euros implies a 19% upside for the stock from the close of recent trading. Mediobanca increased its target price from €430 to €486, which implies a 19.5% upside for the stock.

The supercar maker remains a "compelling long-term investment" because it is associated with exclusivity, high performance and prestige, analysts said.

Ferrari maintains a high level of customer loyalty, and the order queue is scheduled for 18-24 months in advance, Berenberg analysts note. According to their estimates, the "real demand" for Ferrari cars exceeds annual deliveries by two to three times.

"Ferrari stands out in the auto industry as an Hermès-inspired luxury brand," they wrote. Berenberg forecasts the carmaker's profits to grow at double-digit rates over the next five years.

Ferrari shares added 2.9% in Milan trading on September 16, entering a slight plus since the beginning of the year. Nevertheless, their price is still 15% below the record level reached in February. Quotes are pressured by the risk of reduced profitability due to U.S. duties, notes Bloomberg.

That said, analysts expect Ferrari to be able to pass on costs to customers more than some rivals, including German automaker Porsche AG. Analysts' consensus target price on Ferrari shares suggests they are now undervalued by about 8%.

This article was AI-translated and verified by a human editor