Ferrari has recovered from its Luce-unveil slump. Why the stock is still underappreciated

Ferrari’s stock has rebounded, now up 14% since its first EV reveal, after Bank of America reiterated a buy and raised its price target to $458 from $403 (~22% upside). Wolfe Research also initiated coverage with a buy, implying a $436 price target, as analysts argue electrification/Luce concerns are overstated following Ferrari’s $675,000 12 Cilindri Manuale. While Ferrari is still down 24% over the past year and fell 17% in Oct 2025 on weak forward forecasts, analysts expect conservative guidance plus a 2027 model ramp to support rapid growth and margin improvement.

Analysis

The market is signaling that Ferrari’s equity is still priced more on brand control than on powertrain purity. If management can keep the product mix scarce and expensive, a small BEV miss is not an earnings problem; the real margin lever is maintaining pricing power while avoiding capex-heavy electrification that would dilute returns. That makes the near-term setup more resilient than the post-launch selloff implied, and it also reduces the risk that a single controversial model becomes a multi-year multiple reset.

The more interesting second-order effect is competitive: legacy premium OEMs with less pricing power are more exposed if investors conclude they must spend aggressively to prove electrification credibility. Ferrari can afford to be selective; Porsche, Aston-style peers, and even high-end EV narratives at Tesla face a higher bar for preserving exclusivity if the market sees customers rewarding heritage and scarcity over full BEV commitment. The caution is that the ‘offset’ thesis is only valid if demand proves incremental rather than cannibalistic, and if the manual/ICE halo cars do not force discounting elsewhere in the line.

Catalyst timing matters: the next earnings print is a sentiment test, but the real check is 2027-29 guidance and order/mix commentary over the next 1-3 months. If management confirms conservative forecasts and no deterioration in reservation quality, the stock can keep recovering; if they hint that the product cadence is being pulled forward at the expense of margins, the bounce should fade. The consensus may be underestimating how much of this move is a narrative repair trade rather than a durable fundamental rerating.

Key Decisions for Investors

• Go long RACE into the July earnings window; use a 3-6 month call spread rather than outright stock if you want defined downside, because the catalyst is sentiment repair more than immediate earnings acceleration.
• Pair trade: long RACE / short P911.DE over the next 1-3 months to express ‘brand scarcity beats electrification uncertainty’ without taking broad auto beta; thesis breaks if Porsche shows stronger order/margin resilience than Ferrari commentary.
• Set a watch item on RACE’s 2027-29 volume and margin language at earnings: if management softens either, reduce exposure immediately; if they reiterate conservative guidance and no mix damage, add on the post-print strength.
• Avoid chasing the move through BAC or generic analyst upgrade read-throughs; the trade is in Ferrari’s own pricing power and model cadence, not in the sell-side endorsement.