On Thursday, Barclays (LON:BARC) adjusted its stance on Ferrari NV (NYSE:RACE:IM) (NYSE: RACE), downgrading the luxury automaker's stock from Overweight to Equalweight, despite increasing the price target to €400.00 from the previous €375.00. The revision comes ahead of the company's earnings report scheduled for May 7.
The analyst from Barclays noted that Ferrari often sets conservative internal expectations that are lower than the consensus from Bloomberg for the first quarter of 2024. While their own mix model suggests a performance 5% above the Bloomberg consensus, the analyst pointed out that Ferrari's 12-month forward price-to-earnings ratio is now on par with that of Hermes. This indicates that Ferrari may continue to urge market caution.
The increased price target to €400 reflects a positive adjustment despite the rating downgrade. The analyst's comments suggest that while the stock's valuation has improved, its current market position does not justify a more bullish Overweight rating at this time.
Investors and market watchers will be looking to the May 7 earnings report to see how Ferrari's actual performance measures up against internal and market expectations. The report could provide further insights into the company's financial health and future outlook, which are key factors influencing stock performance.
The change in rating and price target by Barclays is an important piece of information for shareholders and potential investors as it provides a revised perspective on the value and potential performance of Ferrari's shares in the near term.
InvestingPro Insights
As Ferrari NV (RACE:IM) (NYSE: RACE) gears up for its earnings report on May 7, real-time data and insights from InvestingPro could provide investors with a deeper understanding of the company's valuation and performance. With a market capitalization of $75.56 billion, Ferrari is trading at a high earnings multiple, with a P/E ratio of approximately 55.89. This is consistent with the high valuation observed by Barclays analysts. Additionally, the company's revenue growth over the last twelve months as of Q4 2023 stands at an impressive 17.17%, indicating a robust increase in sales.
InvestingPro Tips highlight that Ferrari has a perfect Piotroski Score of 9, which suggests strong financial health, and has raised its dividend for 3 consecutive years. These factors may be of interest to long-term investors looking for stable returns. Moreover, the company's strong return over the last three months, with a 25.44% price total return, aligns with the positive sentiment reflected in Barclays' increased price target.
For investors seeking more comprehensive analysis, there are over 18 additional InvestingPro Tips available, providing insights such as the company's ability to cover interest payments with cash flows and its history of maintaining dividend payments for 9 consecutive years. To delve deeper into these valuable insights, visit https://www.investing.com/pro/RACE and remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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