Recent Stock Performance and Market Reaction

Following Ferrari's Capital Markets Day, the stock (RACE) plunged nearly 15%, the steepest drop since its Milan listing. The company raised its revenue forecast for 2025 to approximately €7.1 billion but disappointed analysts with its 2030 sales estimate of €9 billion, which fell short of expectations. Perhaps most troubling for investors is Ferrari's revised electric vehicle strategy, now projecting only 20% of its lineup to be electric by 2030, down from an ambitious 40%. This has dampened investor sentiment and erased gains for the year.

 

Key Takeaways from the Earnings Call

During the earnings call, CEO Benedetto Vigna emphasized the company's resilience amid geopolitical tensions and market volatility, noting a strong order book extending into 2027. Financial highlights included a 4.4% year-over-year revenue growth for Q2, with an EBITDA margin of 39.7%. However, the reduced growth forecast for electric vehicles and potential impacts from currency fluctuations have raised concerns. The company remains committed to client-centricity and product excellence but is navigating through a complex automotive landscape.

 

Valuation and Outlook

Based on the provided fundamental data, Ferrari's current valuation shows a P/E ratio of 42.05 and a market cap of approximately €72.60 billion. With an EPS of €9.69 and a forward P/E of 33.54, the stock appears overvalued given the recent changes in growth projections. The declining momentum in the stock and negative RSI indicators suggest that RACE may continue to face pressure in the short term. However, positive cash flow generation and a strong brand loyalty could support longer-term recovery once the market stabilizes.