As Ferrari Reveals New Elettrica EV, Should You Buy, Sell, or Hold RACE Stock?

Core Insights - Ferrari's stock (RACE) has faced challenges this year due to a slowdown in the luxury market, tariff concerns, and weak sales in China, leading to a reduction in its electric vehicle (EV) ambitions from a target of 40% to 20% by 2030 [1][5][11] Company Performance - Ferrari reported net revenues of 1.79 billion euros ($2.03 billion) for Q2 fiscal 2025, a 4.4% year-over-year increase, but below Wall Street's forecast of $2.15 billion [8] - Operating profit (EBIT) rose to 552 million euros, an 8.1% increase, with a 30.9% operating margin for the quarter [9] - Total shipment volumes remained flat at 3,494 units, reflecting the company's focus on brand exclusivity [9] Product Development - The company unveiled its first electric model, the Elettrica, which is set to launch in late 2026, featuring a top speed of 310 kilometers per hour and a range of at least 530 kilometers [12][14] - The Elettrica's chassis is built with 75% recycled aluminum, emphasizing sustainability, and is expected to start at around 500,000 euros ($580,400) [13] Financial Guidance - Ferrari slightly raised its fiscal 2025 guidance, expecting net revenue of at least 7.1 billion euros ($8.2 billion) and adjusted EBITDA of about 2.72 billion euros [15] - The long-term growth outlook is modest, with a forecast of around 9 billion euros in net revenue by 2030, which did not meet market expectations [16] Market Sentiment - Despite recent setbacks, Wall Street maintains a "Moderate Buy" consensus rating on Ferrari, with an average price target of $505.64, indicating a potential upside of 27% [17][18]