Ferrari has gas in the tank

Deutsche Bank upgraded Ferrari (RACE) to 'buy' and raised its price target to €520, citing significant catalysts expected to drive earnings upside. Key drivers include an anticipated €3 billion share buyback and upgraded financial targets at the October Investor Day, alongside the 2026 launch of the F80 flagship supercar, which is projected to generate over €450 million in incremental earnings not yet factored into consensus estimates. This outlook suggests substantial potential for earnings upgrades for the luxury automaker, whose shares rose 1.7% following the upgrade.

Analysis

Deutsche Bank has upgraded Ferrari to “buy” and increased its price target to €520 from €430, signaling strong conviction in the company's near and long-term prospects. The upgrade is underpinned by two primary catalysts: the upcoming October Capital Markets Day (CMD) and the 2026 launch of a new flagship supercar, the F80. At the CMD, investors anticipate the announcement of a substantial €3 billion share buyback, equivalent to approximately 4% of the company's market value, alongside upgraded financial targets. More significantly, the analysis posits that the F80's launch will generate over €450 million in incremental earnings, an upside that is reportedly not yet factored into consensus estimates. This potential for a material earnings revision is a core component of the bull thesis, with the analyst, Nicolai Kempf, forecasting a 5% earnings upgrade following the CMD. For a company already boasting high profitability with EBIT margins above 30%, these catalysts represent a powerful driver for future growth and a potential re-rating as investor focus shifts to 2026 performance. The market has responded positively, with shares rising 1.7% to €418.40.

Key Decisions for Investors

• Investors should consider the stock's potential for appreciation, as the thesis hinges on significant earnings upside from the F80 model which is not yet reflected in current consensus estimates.
• The upcoming October Capital Markets Day serves as a critical near-term catalyst; confirmation of the €3 billion buyback and upgraded financial targets would validate the bullish outlook.
• It is crucial to evaluate Ferrari's valuation based on its 2026 earnings potential, as the current share price may not fully capture the incremental €450 million in earnings projected from the new halo car.
• Monitor for any updates related to the F80 launch schedule and pricing, as this new model is the central pillar of the long-term earnings growth argument presented by the analyst.