Stock Analysis & Valuation Ferrari N.V. (RACE.SW)

• Previous Close: CHF156.00
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	19.50	-87
Graham Formula	153.20	-2

Strategic Investment Analysis

Company Overview

Ferrari N.V. (RACE.SW) is a globally renowned luxury performance sports car manufacturer headquartered in Maranello, Italy. Founded in 1947, Ferrari designs, engineers, and produces high-end sports cars, including GT, special series, hypercars, and track-focused models. Beyond automotive excellence, Ferrari extends its brand into lifestyle products, licensing agreements, theme parks (Ferrari World in Abu Dhabi and Ferrari Land in Europe), and retail stores. The company operates a network of 172 authorized dealers and 30 retail stores worldwide, alongside e-commerce via store.ferrari.com. Ferrari also engages in motorsports, manages racetracks, and operates museums in Italy. With a market capitalization of CHF 27.93 billion, Ferrari stands as a symbol of exclusivity, performance, and Italian craftsmanship in the luxury automotive sector. Its diversified revenue streams—spanning vehicle sales, brand licensing, and after-sales services—reinforce its resilience in the consumer cyclical industry.

Investment Summary

Ferrari presents a compelling investment case due to its strong brand equity, pricing power, and consistent profitability. With a diluted EPS of CHF 8.46 and net income of CHF 1.52 billion in its latest fiscal year, the company demonstrates robust financial health. Its low beta (0.584) suggests relative stability compared to broader markets, appealing to risk-averse investors. However, Ferrari's premium valuation and exposure to cyclical luxury demand pose risks. The company's capital expenditures (CHF -482 million) and moderate debt (CHF 3.35 billion) are manageable but warrant monitoring. Dividend investors may appreciate its CHF 2.37 per share payout. Ferrari's niche positioning and limited production volumes insulate it from mass-market competition, but reliance on high-net-worth consumers makes it sensitive to economic downturns.

Competitive Analysis

Ferrari's competitive advantage lies in its unparalleled brand prestige, exclusivity, and racing heritage. Unlike mass-market automakers, Ferrari limits production to maintain scarcity, enhancing desirability and resale value. Its vertically integrated manufacturing in Maranello ensures quality control and craftsmanship. The company's Formula 1 dominance (as Scuderia Ferrari) reinforces its performance credentials, attracting enthusiasts and collectors. Financially, Ferrari's operating cash flow (CHF 1.93 billion) supports R&D for hybrid and electric transitions without diluting its brand. Competitors struggle to match Ferrari's emotional appeal, though rivals like Lamborghini and McLaren target similar high-end segments. Ferrari's licensing and experiential ventures (theme parks, museums) diversify revenue while amplifying brand reach. Challenges include balancing electrification with traditional performance expectations and geopolitical risks in luxury demand. Its Swiss listing (SIX) provides currency diversification but exposes it to forex volatility.

Major Competitors

• Porsche Automobil Holding SE (PAH3.DE): Porsche, part of Volkswagen Group, combines luxury with higher production volumes than Ferrari. Its 911 and Taycan models compete with Ferrari's GT lineup. Porsche's strength lies in broader accessibility and SUV (Cayenne) success, but it lacks Ferrari's exclusivity. Financially, Porsche benefits from VW's scale but is less profitable per unit.
• Mercedes-Benz Group AG (MBG.DE): Mercedes-AMG challenges Ferrari in high-performance segments (e.g., AMG GT). Mercedes' advantage is its full-range luxury portfolio and electrification lead (EQ series). However, its mass-market models dilute brand prestige compared to Ferrari's pure-play exclusivity. Strong R&D budgets support innovation but with lower margins.
• Lamborghini (via Audi AG) (LAMB.MI): Lamborghini, owned by Audi (VW Group), is Ferrari's closest rival in supercars (Aventador, Huracán). It matches Ferrari's Italian heritage but leans toward aggressive design. Limited production ensures exclusivity, though corporate ownership may dilute autonomy. Lamborghini's SUV (Urus) diversifies revenue but risks brand dilution.
• McLaren Group (MCL.L): McLaren competes in hypercars (e.g., P1, Speedtail) and F1. Its lightweight engineering is renowned, but financial instability and lack of scale vs. Ferrari are weaknesses. McLaren's road-car division struggles with profitability, relying heavily on racing success for brand equity.
• Stellantis N.V. (Maserati) (STLA): Maserati, under Stellantis, targets Ferrari's GT segment (MC20). Maserati's lower price points attract aspirational buyers, but quality issues and weaker brand cachet limit competitiveness. Stellantis' scale aids cost-sharing, but Maserati lacks Ferrari's independent focus and racing pedigree.