Ferrari (AO) | Buy | You said you wanted something completely different

Research evidence excerpt

Ferrari (AO) | Buy | You said you wanted something completely different

Ferrari Buy | Target Price: EUR360.00

Company description Management

Ferrari primarily designs and manufactures high-end sports cars (13,752 units in John Elkann, Chairman

2024). The group offers new and used vehicles, warranty programs, financial Benedetto Vigna, CEO

support, and maintenance to selected customers globally. Ferrari also supplies Antonio Picca Piccon, CFO

engines, primarily to its own Formula 1 team. The group operates a network of Key shareholders

retail operations, offering products ranging from watches to sunglasses and Free float 55.61%

various apparel items, while two theme parks are also branded Ferrari. Exor 21.20%

Trust Piero Ferrari 10.61%

Other public shareholders 68.19%

Investment case Valuation methodology

The combination of rising EBITDA and controlled capex makes We use a multi-criteria valuation analysis for Ferrari, focusing on

us comfortable that the group should achieve strong FCF in the P/E, EV-based metrics and a DCF.

future, after posting EUR5.2bn in cumulative FCF over 2015-24. We also compare Ferrari to an unusual peer group for Autos

Management has the clear intention of prioritising profits over stocks: Luxury names, looking at Hermès as a key aspiration.

revenues and maintaining exclusivity after a more dynamic A DCF seems to be the right methodology for Ferrari as well,

volume growth in FY 2018-22 (slower now). With limited given its unusually strong track record in Autos. Using a 6.8%

penetration among UHNWIs, there is, however, room to grow WACC and 3.8% g implies a fair value of c. EUR380.

the brand's reach. Risks to our rating

The brand expansion strategy into new luxury segments has Global macro shock potentially driving a demand shock among