Wall Street analysts cast admiring glances the way of Ferrari (RACE) on Friday as the Italian carmaker caught two upgrades despite the threat of auto tariffs hanging over the industry.
Barclays upgraded Ferrari to Overweight (Buy) from Equal Weight (Hold) with an unchanged price target of €485 for the Milan-listed stock (IT:RACE), equivalent to $523.60 for the NYSE-listed RACE shares.
The luxury carmaker confirmed its full-year guidance yesterday, despite the latest 25% U.S tariffs on foreign car imports, which underscores its “unique resilience/safe-haven status,” Barclays analyst Henning Cosman tells investors in a research note. The firm believes the down 20% share drop since February 14th offers a good entry point.
Kepler Cheuvreux likewise upgraded Ferrari to Buy from Hold with an unchanged price target of €470, or $507.40 for the U.S.-listed entity, citing valuation for the upgrade following the recent selloff. Ferrari offers exposure to a “unique client group largely immune to the current volatility,” the analyst tells investors in a research note.
While Ferrari has maximum exposure to tariffs since all its cars are made in Italy, it is seen as being much more able to pass on price hikes to consumers, given the high demand for its cars. Evidence of this came yesterday as Ferrari hiked prices by up to 10% on most cars sold in the U.S. from April 2nd, with Donald Trump’s tariffs of 25% are due to take effect the following day it seems. It also signalled that it would largely stick to its prior full-year financial guidance with the move to raise prices.
Less admiring, JPMorgan lowered its price target on Ferrari to $460 from $525 and kept an Overweight rating on the shares. The firm also cut price targets for shares of General Motors (GM) and Ford (F), citing increased potential for “material earnings risk from draconian auto tariffs that now seem likelier than ever to be imposed as soon as April 3.”
Is RACE a Good Stock to Buy?
The upgrades leave RACE with a Moderate Buy consensus rating with nine Buys, six Holds and one Sell rating from analysts in the last three months. The average RACE price target of $504.32 implies about 15% upside.
