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Ferrari shares are rated only as a “hold” by a couple of investment banks but the worries that undermined the price seem to have died down and stability has returned.
But the question remains, will normal service be resumed anytime soon, and Ferrari shares regain their star status as a money-making luxury investment rather than as a mere manufacturer of expensive sports cars.
HSBC Global Investment Research has downgraded Ferrari to “hold” from “buy” and slashed its target price for the shares to €345.0 ($401.45) from €415.0 ($482.91). The shares stood at just over €307 ($357) on January 15, according to Reuters data.
Ferrari shares have dived by about 35% over the last year, including an almost 25% slump in early October when it disappointed a meeting of investors at the Maranello headquarters. Investors expected to be reassured that the company’s golden record of huge profit margins based on making just enough roaring, screaming, mainly red, dream machines and just fail to meet demand was here to stay.
That mission failed.
“It has been a painful three-months since management set out their plans to 2030 in October. Projected top-line growth of about 5% was lower than we and the market expected and the about 6% projected growth in earnings per share suggested operating leverage would be low,” HSBC said in a report.
Management desires tempered expectations
“We don’t think the modest growth outlook reflects a weakness in the underlying fundamentals of the business, but rather management’s desire to temper expectations and emphasise the importance of exclusivity. We see scope for positive surprise vs the long-term guidance, but not in the first half of 2026”.
“Meanwhile, the narrative from management continues to focus on the headwinds, which we suspect will exacerbate concerns about deeper problems,” the report said.
HSBC expects a ramp-up of F80 sales and an increasing share of “Specials” to be key profit drivers, perhaps offset by R&D spending and foreign exchange headwinds. Specials are high-performance track versions of production cars and sell from between $470,000 and $1 million. These include the 296 Speciale, a more extreme version of the 296 GTB hybrid, and the SF90 XX Stradale. There are also a limited number of homage models like the Daytona SP3, which sells for more than $1.3 million.
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HSBC expects a 29.2% adjusted EBIT (earnings before interest and tax) margin for 2026, which would be flat compared with 2025.
UBS retains its “buy” rating on Ferrari shares and expects the first half of 2026 to be softer than the second half.
“With consensus expectations now revised to more reasonable levels, the risk of near-term negative surprises seems more limited. As a result, even meeting expectations should help ease concerns about Ferrari’s business model and strengthen confidence in its long-term story, potentially supporting a rerating from current lows.” UBS said in a report.
UBS’s 12-month share price target is $555.0 (€477).
Bernstein Research rates Ferrari as “outperform” with a share price target of $395.00 (€339.50).
Is guidance a floor or a ceiling?
“The direction of Ferrari’s stock now depends on management proving its new plan guidance is very much a floor rather than a ceiling. We believe Ferrari has unrivalled ability to control its revenues and margins, but for the stock to work, it must remind the market that it has not lost this superpower,” Bernstein said in a report.
“The limited implied upside to our price target reflects the current company messaging that veers from stressing the guidance is a floor to attempts to tamp down enthusiasm. We expect Ferrari to continue to beat and raise, and therefore see scope for upward revision of our (share price target) during the course of the year,” Bernstein said.
Investment researcher Jefferies is also in the “hold” camp, saying investors will be holding back until the 2025 financial results are published on February 10, and the projections for 2026.
This wallowing at the lows for Ferrari’s share price has surprised investors who were relying on a firmly established tradition that the shares always weaken, then quickly rally, after management’s ultra-conservative profit forecasts. But not this time, leading to worry about what troubles lie ahead.
Could the market for luxury goods, which seems to thrive even through the roughest economic waters, finally be running out of road? Is there a compelling competitor about to unveil stunning, sexy sports cars?
Electric Ferrari’s Silence Poses Risk
Could a Chinese automaker be about to launch its own range of sports cars for the super-rich? They would certainly have the resources to do it, but the kind of cache Ferrari has built up would take decades to match.
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And then there is the Ferrari Elettrica, the first all-electric launch later this year. Could investor hesitancy be linked to the launch of this $580,000 vehicle, the first silent Ferrari?
Other important issues in 2026 will include developments in the U.S., which accounts for 24% of sales, which will test Ferrari’s ability to deliver above mid-single digit growth. There was worry the EU may end the sale of new ICE vehicles in 2035, but the European Commission proposed in December to change the ban from 100% of CO2 emissions to 90%. This was seen as a sop to the luxury sector of manufacturers like Ferrari, Aston Martin, Volkswagen’s Bentley and Lamborghini.
Investors now await Ferrari’s 2025 financial results on February 10, which will also include its forecasts for the rest of the year and beyond.