Morgan Stanley on Monday moved Ferrari (RACE) to an Overweight rating from Equal Weight, saying recent share weakness has priced in more severe, lasting problems than the bank’s work suggests. The firm simultaneously lifted its price target to €380 from €330 - a level that implies roughly 24% upside from current prices.
The bank’s analysts highlighted a pronounced divergence between share-price performance and consensus earnings revisions. Over the last 12 months, Ferrari shares have fallen about 26%, while consensus earnings forecasts for 2026-27 have been pared by only around 4%. As the team put it, "has been driven partly by negative earnings revisions, but primarily by multiple compression."
Edouard Aubin and colleagues said their fieldwork and analysis indicate the market has overreacted by treating recent concerns as terminal for the brand. "Our latest work suggests the market has moved too far in pricing these issues as terminal brand risk," the analysts wrote.
The de-rating followed several specific worries voiced by investors: Ferrari’s slower growth trajectory outlined at its October 2025 capital markets day; pressure on residual values for hybrid models such as the 296 and SF90; and uncertainty tied to Luce, the firm’s first battery-electric vehicle. Despite those points, Morgan Stanley’s dealer checks in the U.S. and Europe suggest those concerns have not yet caused persistent brand impairment.
Residual values were flagged by the bank as the most important swing factor. Dealer feedback described the 296 GTB as repeatedly at or near its floor, with transaction activity improving. Values for SF90 Coupe and Spider models appear to be stabilising after a prior, sizeable reset. Those signs underpin the bank’s view that the worst of the resale-value adjustment may be behind Ferrari.
The analysts also observed an interesting secondary effect from Ferrari’s electrification push: increased collector interest in older internal-combustion models. They see this dynamic as supportive of the broader residual-value ecosystem for the brand.
On Luce, dealer commentary was mixed to negative in the short term, with criticism concentrated on styling, a launch price of €550,000 in Italy, and uncertainty about its intended buyer. Morgan Stanley argued, however, that a weak initial reception appears to be already reflected in market pricing. The bank suggested disciplined production allocation could limit any potential brand damage while preserving optionality to attract new clients, noting that "can limit any brand damage while leaving option value with new clients."
As part of its valuation work, Morgan Stanley reduced its weighted average cost of capital to 7.5% from 8.1%, reflecting stronger confidence in the durability of Ferrari’s demand. The firm also nudged up its FY27-30 earnings estimates by roughly 2% on average.
The analysts pointed to Ferrari’s exposure to a so-called K-shaped recovery as a structural tailwind, noting wealth creation remains concentrated among the ultra-high-net-worth individuals most relevant to the marque. They cited projections that the global UHNWI population is expected to grow by around 235,000 between 2026 and 2031, with the U.S. representing roughly 58% of that increase.
In sum, Morgan Stanley’s upgrade rests on the bank’s conclusion that recent valuation compression has overemphasised risks that are either transitory or manageable through disciplined allocation and a resilient wealthy-customer base.