Is Ferrari (RACE) Stock a Buy Now? Morgan Stanley Thinks So

TLDR

• Morgan Stanley upgraded Ferrari (RACE) to Overweight from Equal Weight, raising its price target to €380 from €330
• Ferrari stock jumped 4.4% in Milan trading on Monday following the upgrade
• The stock had fallen roughly 26% over the past 12 months, but earnings estimates were only cut by around 4%
• Morgan Stanley’s dealer checks in the U.S. and Europe found no lasting brand damage from recent concerns
• Consensus analyst price target now sits at €377.88, implying around 23% upside, with 23 Buys and 6 Holds among covering analysts

Ferrari (RACE) stock climbed 4.4% in Milan trading on Monday after Morgan Stanley upgraded the Italian automaker to Overweight from Equal Weight, lifting its price target to €380 from €330 — implying roughly 24% upside from Friday’s close.

Ferrari N.V., RACE

The upgrade follows a rough stretch for the stock. Ferrari has dropped about 26% over the past 12 months, even as consensus earnings estimates for 2026-27 were trimmed by only around 4% over the same period.

Morgan Stanley described the gap as a clear mismatch. The analysts, led by Edouard Aubin, said the selloff “has been driven partly by negative earnings revisions, but primarily by multiple compression.”

In other words, the market has been re-rating the stock lower at a pace that doesn’t match the actual earnings picture.

The concerns behind that de-rating were real. Investors had been unsettled by a slower growth plan laid out at Ferrari’s October 2025 capital markets day, pressure on residual values for hybrid models like the 296 and SF90, and uncertainty around the Luce — Ferrari’s first battery-electric vehicle.

Morgan Stanley went out and checked. Dealer contacts in the U.S. and Europe came back largely reassuring.

Residual Values Appear to Be Stabilising

Residual values were flagged as the most important swing factor for the stock. Feedback from dealers pointed to the 296 GTB trading at or near the floor, with transaction activity picking up. SF90 Coupe and Spider values also appear to be stabilising after a sharp reset.

The analysts said the worst is likely behind on this front.

On the Luce, dealer feedback was mixed to negative in the near term. Criticism focused on the design, the €550,000 launch price in Italy, and questions about who exactly the target buyer is.

But Morgan Stanley argued the weak reception is already baked into the stock price. It added that Ferrari’s production discipline “can limit any brand damage while leaving option value with new clients.”

The bank also noted that Ferrari’s electrification push has rekindled collector interest in older internal-combustion models, which it sees as a positive for the broader residual-value picture.

K-Shaped Economy Seen as a Tailwind

Morgan Stanley pointed to Ferrari’s exposure to ultra-high-net-worth individuals as a structural support for the brand. Property consultant Knight Frank projects the global UHNWI population will grow by around 235,000 between 2026 and 2031, with the U.S. accounting for roughly 58% of that increase.

The bank lowered its weighted average cost of capital to 7.5% from 8.1%, reflecting higher confidence in Ferrari’s demand durability. FY27-30 earnings estimates were raised by around 2% on average.

Across 29 covering analysts, the consensus rating remains a Buy, with 23 Buys and 6 Holds. The average 12-month price target now stands at €377.88, implying approximately 23% upside from the June 12 closing price.

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