Deutsche Bank upgrades Ferrari, says new F80 supercar will drive major earnings growth

Deutsche Bank upgraded Ferrari (RACE) to Buy from Hold, citing catalysts including an upcoming October Capital Markets Day expected to unveil ambitious mid-term targets like adjusted EBIT margins over 30% and a €3 billion share buyback. The new F80 supercar is projected to generate over €450 million in incremental 2026 earnings, a significant upside not yet factored into consensus. This strong outlook, supported by robust free cash flow generation, prompted a nearly 2% rise in Ferrari's U.S.-listed shares.

Analysis

Deutsche Bank's upgrade of Ferrari (RACE) to Buy from Hold is predicated on both near-term and long-term catalysts that are not fully reflected in current consensus estimates. The upcoming October Capital Markets Day is a significant near-term driver, with expectations for ambitious mid-term targets including adjusted EBIT margins exceeding 30% and a new €3 billion share buyback program, equivalent to 4% of the current market capitalization. This event is anticipated to trigger approximately 5% in upward revisions to 2026 consensus earnings. A major long-term catalyst is the new F80 supercar, a limited-run model of 799 units priced at €3.6 million, which is projected to generate over €450 million in incremental earnings in 2026 alone. Crucially, the analyst believes this substantial earnings contribution is not yet factored into market expectations. This single model is key to driving forecasted adjusted EBIT margins above 31% this year, a notable increase from over 29% in 2024. The company's financial strength is further supported by projected annual industrial free cash flow exceeding €1.2 billion from 2026 to 2030, reinforcing the feasibility of the large-scale capital return program.

Key Decisions for Investors

• Investors should assess the potential for share price appreciation leading into the October Capital Markets Day, as the event is expected to reveal ambitious targets and a €3 billion buyback that could act as significant positive catalysts.
• Monitor consensus earnings estimates for 2026, as the projected €450 million-plus incremental earnings from the new F80 supercar are not yet factored in, representing a potential source of significant future earnings beats.
• Consider the strong free cash flow generation, projected to exceed €1.2 billion annually, as a pillar supporting the investment thesis, as it underpins the firm's ability to fund both growth initiatives and the substantial new capital return program.