Analyst’s Disclosure:I/we have a beneficial long position in the shares of RACE, TSLA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether ...

Analyst’s Disclosure:I/we have a beneficial long position in the shares of RACE, TSLA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether ...

Core Viewpoint - Ferrari (RACE) has experienced a significant decline of 15% over the past four weeks, but it is now in oversold territory, indicating a potential trend reversal as analysts expect better earnings than previously predicted [1] Group 1: Technical Analysis - The Relative Strength Index (RSI) is a momentum oscillator that helps identify whether a stock is oversold, with readings below 30 indicating oversold conditions [2] - RACE's current RSI reading is 24.58, suggesting that the heavy selling pressure may be exhausting itself, leading to a potential trend reversal [5] Group 2: Fundamental Analysis - Over the last 30 days, the consensus EPS estimate for RACE has increased by 6.1%, indicating a positive trend in earnings estimate revisions, which typically correlates with price appreciation [7] - RACE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [8]

Core Insights - Ferrari's stock dropped nearly 15% due to disappointing management projections, but it is currently trading within a historical support range, which has previously led to significant rebounds averaging 22.8% [1] Group 1: Company Performance and Projections - Ferrari has reduced its 2030 electric vehicle (EV) production target from 40% to 20%, indicating a more conservative approach to electrification [5] - The company projected 2030 EBITDA of at least €3.6 billion, suggesting a slower growth rate than earlier forecasts, which has raised investor concerns [5] - The launch of Ferrari's first EV, the Elettrica, has been delayed until late 2026, with a second EV model still in early planning stages, creating uncertainty about future product offerings [5] - Revenue growth for Ferrari has been 12.4% over the last twelve months (LTM) and an average of 15.7% over the past three years [5] - The company has a free cash flow margin of approximately 18.2% and an operating margin of 28.9% LTM [5] - Ferrari's stock is currently trading at a price-to-earnings (PE) multiple of 46.0, which is higher compared to the S&P [5] Group 2: Market Context and Risks - Historical data shows that Ferrari's stock has experienced significant declines during market downturns, including a 38% drop during the inflation shock and a 28% decline during the Covid sell-off [4] - The stock's current trading levels have previously seen buying interest, with three significant rebounds in the past decade [1][3]

Ferrari’s brand is built on growling gas engines. Can a supercar that hums still set pulses racing?@DanieleLepido explains why the automaker is gambling on its Elettrica EV https://t.co/ZBrlruNLVy https://t.co/Ntl8tycTNR ...

Core Viewpoint - Ferrari's shares experienced a significant decline in both European and U.S. markets following the release of disappointing earnings guidance, marking the company's worst trading day since its IPOs in respective markets [1][2]. Financial Performance - Ferrari's stock fell nearly 15% to just over $407 in the U.S. market, and over 14% in Milan, dropping about €60 to around €357.60, representing the largest single-day loss since its listing in January 2016 [1][2]. - The company projected revenue of €7.1 billion for the current year, an increase from previous forecasts of just over €7 billion, and expects revenue to reach around €9 billion by 2030, with adjusted earnings of at least €3.6 billion, up from just below €2.7 billion [2]. Analyst Insights - RBC Capital analyst Tom Narayan noted that Ferrari's earnings estimates for 2030 were conservative and fell below previous growth projections, indicating a potential downshift in earnings expectations [3]. - CFRA downgraded Ferrari's stock to a "sell" and reduced its price target from $475 to $350, citing concerns over slowing growth [4]. Management Commentary - Ferrari CEO Benedetto Vigna acknowledged that expectations for higher revenue were not met, emphasizing the importance of executing achievable goals [5]. Market Sentiment - Despite the negative outlook from some analysts, others, such as JPMorgan and Deutsche Bank, expressed confidence in Ferrari's long-term growth prospects, with Deutsche Bank upgrading the stock to a "buy" and raising its price target to €520 [5]. Strategic Shift - Ferrari announced a reduction in its electric vehicle production plans, now targeting a model lineup of 40% internal combustion engines, 40% hybrids, and 20% fully electric cars, down from earlier projections of 40% EV sales [6].

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]

Earnings and Expectations - Companies are likely to beat EPS, driven by tech, with expectations around 7%-8% in Q3 [1] - Analysts have been raising estimates coming into Q3 earnings season, unlike typical earnings seasons [3] - Companies can beat earnings again, probably printing in the low double digits [3] Consumer Trends - The high-end consumer has stayed strong, while the lower-end consumer has struggled [6] - There is no significant impact from tariffs in terms of spending and consumer sentiment yet, but potential impact in holiday season or early 2026 [6][7] Technology and AI - Tech stocks are expected to lead earnings growth [3] - AI and MAG Seven stocks can continue to drive the market higher, with Alphabet being a preferred choice [10] - Google's advertising business is not significantly at risk because of OpenAI, and Google Gemini has a lot of upside [10] - The winners in AI are large mega-cap companies like Alphabet, Microsoft, NVIDIA, and Broadcom, with low supply [12] - Infrastructure, particularly data centers, is a top pick, especially those supporting AI [14] Market Outlook - Q4 is normally a strong quarter from a seasonal point of view, especially when the market is up substantially year to date [13] - Odds are in favor for the rally to continue [13]

Core Insights - Ferrari's commitment to its foundational values of passion, innovation, and craftsmanship remains strong as it navigates the challenges of the current decade [1][2] Group 1: Company Overview - Ferrari's public debut on October 21, 2015, marked a significant moment, prompting global scrutiny on whether the company could maintain its core values while adhering to market discipline [2] - The company reflects on its history and evolution, emphasizing the importance of its spirit, which was established by Enzo Ferrari and continues to be upheld by its employees [1] Group 2: Future Outlook - The company expresses ambition and humility in facing upcoming transformations, reaffirming its strategic direction and commitment to its legacy [1] - The 75th anniversary in 2022 served as a pivotal moment for Ferrari to reinforce its vision for the future [1]

Core Viewpoint - Ferrari's shares experienced a significant decline in both European and U.S. markets following the release of disappointing earnings guidance, marking the company's worst trading day since its stock market debut [1][2]. Financial Performance - Ferrari's stock fell over 13% to approximately $414 on the New York Stock Exchange and more than 14% in Milan, dropping about €60 to around €357.60, representing the largest single-day loss since its listing in January 2016 [1][2]. - The company projected revenue of €7.1 billion for the current year, an increase from previous forecasts of just over €7 billion, and anticipates revenue of around €9 billion by 2030, with adjusted earnings expected to be at least €3.6 billion, up from just below €2.7 billion [2]. Analyst Insights - RBC Capital analyst Tom Narayan noted that Ferrari's earnings estimates for 2030 were conservative and fell short of the growth rate projected in 2022, indicating a potential downshift in earnings expectations [3]. - CFRA downgraded Ferrari's stock to a "sell" and reduced its price target from $475 to $350 due to concerns over slowing growth [4]. Management Commentary - Ferrari CEO Benedetto Vigna acknowledged that expectations for higher revenue were not met, emphasizing the importance of executing achievable goals [5]. Market Reactions - While some analysts expressed concerns, others remained optimistic about Ferrari's growth potential. JPMorgan analysts expressed confidence in the company's ability to meet long-term goals, citing strong demand [5]. - Deutsche Bank upgraded Ferrari's stock to a "buy" and raised its price target to €520, reflecting a more positive outlook [5]. Electric Vehicle Strategy - Ferrari announced a reduction in its electric vehicle production plans, now targeting a lineup of 40% internal combustion engines, 40% hybrids, and 20% fully electric cars, down from earlier projections of 40% EV sales [6]. - The company introduced its first electric vehicle, the "Elettrica," with deliveries expected to begin in late 2026 [6].