Overlooked Stock: Investors See Red Light on RACE Guidance

Company Overview - Ferrari's shares are under significant pressure following its capital markets day presentation, where it raised long-term financial targets but still fell short of consensus estimates [1][4] - The company has reduced its sales guidance for electric vehicles, leading to a drop in shares to six-month lows [1][4] Financial Performance - Last year, Ferrari sold approximately 13,700 units, indicating a very small sales volume for a luxury brand [4] - The company previously guided for around 7% sales growth for fiscal year 2025, but now projects a longer-term topline sales growth of about 5% [6][7] - The expected delivery date for an all-electric vehicle has been pushed back to late 2026, and the forecast for electric vehicles as a percentage of total production by 2030 has been cut from 40% to 20% [7] Market Reaction - The market is reevaluating Ferrari's valuation due to the widening range of EBITDA growth estimates, which are projected between 30% and 40% [9][10] - The stock is perceived as expensive, and any conservative outlook from the company is being negatively received by investors [11][16] Industry Context - Other luxury brands, such as Aston Martin, are also scaling back their electric vehicle plans, reflecting broader market demand challenges [12] - The transition to an electric vehicle model poses challenges for legacy luxury brands like Ferrari, which must maintain premium pricing while managing capital expenditures and R&D costs [14][15]