Ferrari is standing on the top step of the podium, according to Morgan Stanley. Analyst Adam Jonas reiterated his overweight rating and top pick choice on Ferrari. He also raised his price target to $340 from $310 on account of foreign exchange fluctuations, earnings revision and a slight increase in his estimated EBITDA multiple. The new price target implies 8.4% upside from Thursday’s close. “Ferrari trades at a justified premium to luxury brands, but at a discount to luxury leader, Hermes, albeit with more opportunity to grow organically via: new customers, new segments and geographically in China & Asia-Pac, as well as exhibiting a unique moat with a world renowned brand and a 12+ month customer orderbook,” Jonas wrote in a Thursday note. The analyst cited the company’s strong growth potential and execution, with global shipments expected to have a compound annual growth rate of about 7% through 2030. Morgan Stanley maintained his bull case estimates of $420 per share, which implies 34% upside from current levels. This scenario will come about if Ferrari has an “extremely profitable” shift to electric vehicles and retains a higher multiple than Hermes, according to Jonas. Meanwhile, he raised his bear case projections to $220 from $180. Morgan Stanley predicts the bear scenario could occur if a weaker macro environment results in low shipments and demand levels, as well as a loss of brand relevance. Shares have surged 46.3% year to date and more than 62% over the past 12 months. The stock hit an all-time high on June 30, putting its market cap ahead of General Motors and in close range of Ford’s. —CNBC’s Michael Bloom contributed to this report.
