Morgan Stanley dropped its recommendation to buy Ferrari shares. What's wrong with them?
Investbank is waiting for a more favorable entry point
Morgan Stanley has worsened the rating of shares of Italian supercar manufacturer Ferrari from overweight, which is equivalent to a recommendation to buy these securities, to neutral equal weight, reports CNBC. The team of analysts of the investment bank believes that the prospects for growth of quotes of the company are limited: it has reduced the target price from $425 to $520, Investing.com specifies .
"We see only 8% upside potential for the stock and therefore remain on the sidelines for now. We forecast [Ferrari's] revenue to grow less than 5% over the next three quarters and are waiting for a more favorable entry point," Morgan Stanley said in a note, as quoted by CNBC.
Analysts explained that Ferrari's decision to strictly limit its volume expansion until 2030 will lead to "relatively moderate growth" in the short to medium term, although it will have a positive impact on the brand's appeal over the long horizon. Morgan Stanley also cited investor concerns over the launch of Ferrari's first electric car, a factor that could "constrain valuation multiples in the coming months."
The carmaker's shares fell 3.5% in Milan on December 8. Its securities on the New York Stock Exchange lost about 3%. The company's value has declined by more than 10% this year, with the weakest dynamics in the last three months - minus 20%. On October 9, Ferrari suffered its worst collapse in nine years, publishing a modest forecast for 2025.
What other analysts are saying
- Bank of America last week reiterated a recommendation to invest in the company's stock and called it one of the best investment ideas for 2026. "For us, Ferrari remains a compelling option to buy despite the conservative five-year outlook presented in October".
- In late November, UBS also maintained a Buy rating on the luxury car maker's securities and raised its target price to $563, suggesting a 43% upside potential as of Dec. 8.
- Goldman Sachs initiated coverage on Ferrari stock at almost the same time, giving it a similarly bullish rating. The investment bank believes the company will beat Wall Street consensus estimates for 2026 and 2027.
A total of 18 analysts out of 26 advise buying Ferrari shares, MarketWatch data show . Seven hold a neutral view, and there is one who recommends selling these securities. At the same time, the average target reflects a more cautious position: it is only 0.7% above the level of the last closing.
This article was AI-translated and verified by a human editor
