Key Takeaways
- Morgan Stanley elevated Ferrari (RACE) to Overweight from Equal Weight, boosting the price objective to €380 from €330
- Shares surged 4.4% during Milan trading sessions Monday in response to the analyst upgrade
- Despite a 26% decline over twelve months, earnings projections were reduced by merely 4%
- U.S. and European dealer surveys conducted by Morgan Stanley revealed no permanent brand erosion
- Wall Street consensus target price reached €377.88, suggesting roughly 23% appreciation potential, with 23 Buy ratings and 6 Hold recommendations
Shares of Ferrari (RACE) advanced 4.4% during Monday’s Milan trading session after Morgan Stanley elevated the luxury automaker to Overweight from Equal Weight, simultaneously increasing its valuation target to €380 from €330 — representing approximately 24% upside from Friday’s closing price.
The rating enhancement arrives after a challenging period for shareholders. Ferrari has declined approximately 26% during the trailing twelve months, while Wall Street’s consensus earnings forecasts for 2026-27 experienced only modest 4% reductions during the identical timeframe.
Morgan Stanley characterized this divergence as a significant disconnect. The research team, headed by Edouard Aubin, noted the share price decline “has been influenced partially by downward earnings adjustments, but predominantly by valuation multiple contraction.”
Essentially, market participants have been repricing the shares downward at a velocity that doesn’t align with underlying earnings fundamentals.
The concerns fueling this valuation compression had substance. Market participants were disturbed by a more conservative expansion strategy unveiled during Ferrari’s October 2025 investor presentation, weakening resale values for hybrid variants including the 296 and SF90, and ambiguity surrounding the Luce — Ferrari’s inaugural fully-electric offering.
Morgan Stanley conducted field research. Conversations with dealerships across the United States and European markets returned predominantly positive signals.
Used Vehicle Values Showing Signs of Stabilization
Resale value trends were identified as the most critical variable for equity performance. Intelligence gathered from dealer networks indicated the 296 GTB trading at or approaching bottom levels, accompanied by increased transaction volumes. SF90 Coupe and Spider valuations similarly appear to be finding support following substantial adjustments.
The research team concluded the most severe pressure has likely concluded on this matter.
Regarding the Luce, dealer sentiment ranged from lukewarm to pessimistic for the immediate future. Concerns centered on aesthetic design, the €550,000 Italian launch pricing, and ambiguity regarding the intended customer demographic.
However, Morgan Stanley contended the subdued response is already reflected in current valuations. The firm emphasized that Ferrari’s disciplined production approach “can minimize any reputational impact while preserving optionality with emerging clientele.”
The investment bank additionally observed that Ferrari’s electrification strategy has revitalized collector demand for legacy combustion-engine vehicles, which it interprets as favorable for overall residual value dynamics.
Wealth Inequality Dynamics Provide Structural Support
Morgan Stanley highlighted Ferrari’s concentration among ultra-wealthy individuals as fundamental brand protection. Global property consultancy Knight Frank forecasts the worldwide UHNWI demographic will expand by approximately 235,000 individuals between 2026 and 2031, with American wealth creation representing roughly 58% of this growth.
The bank reduced its weighted average cost of capital assumption to 7.5% from 8.1%, signaling increased conviction in Ferrari’s demand resilience. Fiscal year 2027-30 profit projections were lifted by approximately 2% on average.
Among 29 Wall Street analysts covering the stock, the consensus recommendation remains Buy, comprising 23 Buy ratings and 6 Hold recommendations. The average twelve-month valuation target currently registers €377.88, implying around 23% appreciation from the June 12 closing quotation.
