Buy Ferrari Shares: Stock Analysis, Forecast And Target Price
Published: April 12th, 2021 by Valentina
Ferrari is one of the most famous brands in the world, synonymous with luxury and sportiness, it recalls the history and the blazon of the best Italian sports cars. To buy Ferrari shares does not only mean making an investment, but also focusing on one of the most well-known and successful Italian companies in the world.
In this review, we will analyze Ferrari stock with the iconic RACE ticker and we will find out whether, in addition to sports cars, there is really the possibility of a good equity investment.
OnlineTradingCourse.net is a point of reference for investors who are looking for an impartial and analytical guide on the markets and, specifically, on the Ferrari asset.
The economic crisis of these months seems not to have influenced the shares of this car brand. While the world’s biggest car manufacturers are in deep crisis, is it just a matter of time or is Ferrari “immune” to the problems of the auto sector?
Find out more in our review, which starts with the most suitable online brokers to negotiate this asset on the stock exchange. Among these, the industry leader eToro stands out.
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 10€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
Buy Ferrari shares: Origins and Company
Enzo Ferrari founded the Scuderia Ferrari in 1929 with the main purpose of building racing cars. The entire business focused on motor sports before building the first road car in 1947.
The legendary “prancing horse” has also been a cornerstone of Formula 1 racing since the start of the world championship races in the 1950s. Purchased by the Fiat Group in 1969, Ferrari has maintained a presence in motor sports, particularly in Formula 1.
At the same time, the Italian car manufacturer has also produced famous road machines such as the Dino, the 288 GTO, the F40, the F50 and the Enzo.
Maranello has hosted Ferrari since the 1940s, with over 250,000 square meters of area, 45 buildings, and over 3,000 workers. This is where passion, innovation, and technology come together to create the most famous sports cars in the world.
On the 29th October 2014, the FCA group, resulting from the merger between Fiat and Chrysler manufacturers, announced the demerger of its luxury brand, Ferrari.
The goal was to transform Ferrari into an independent brand and it seems that this has rapidly been achieved.
Buy Ferrari shares with the best brokers
To buy Ferrari shares or just to evaluate this investment makes you already feel privileged in some way, right?
But what is the cheapest and safest method to invest on the Ferrari stock?
There are online brokers that offer CFDs (Contracts for Difference), derivatives that replicate the price of the shares and allow you to invest (up or down) without paying trading commissions.
CFDs are regulated contracts like Bond, Etf, etc. Therefore completely safe.
The main advantages of CFDs are:
- They can be traded directly online in total security.
- Use of financial leverage, a multiplier that allows – for example – to negotiate with 3,000 euros having only 100 in the account.
- It is possible to invest both upwards and downwards and earn (if the forecast is correct) in any market scenario.
- No commissions and the minimum deposit is between 100 and 250 euros.
But there is also a disadvantage: Since you do not really get hold of the shares, you do not participate in stock dividends, but speculate on price changes.
eToro is the most used online broker in the world and its over 7 million active users are a clear sign of a certain level of reliability.
Below, you can see the screenshot of the CFD “RACE”, which relates to the Ferrari asset. The software is very intuitive but also offers all the tools useful to the most demanding traders.
To buy Ferrari shares just click on “invest”, decide whether to buy or sell the asset (invest upwards or downwards) and how much to invest in the operation.
The safety of this intermediary is guaranteed by the FCA authorization, which certifies compliance with the rules.
But the tool that made eToro famous is its automatic trading feature, the so-called Copy Trading, which allows you to copy the operations of the best traders in the world (on eToro) in a totally automatic and free way.
Copy Trading works like this:
- Register on eToro
- In the section “people”, you can choose the traders to copy based on the performance.
- With a click, Copy Trading will copy exactly the same operations of the chosen traders in your account.
- At this point, you will get the same returns as these trading experts (of course, in proportion to your investment), without doing anything else.
Both Copy Trading as well as traditional trading can also be tested on a free Demo account, without taking real risks.
For more details you can read our full eToro review.
ForexTB is a very reliable broker and allows you to trade Ferrari shares in a very safe way.
Its trading platforms are at the forefront. One is the platform we see below: Simple and clear, it is sought after for its ease of use and for the easy access from any web browser, without downloading any software.
For the most demanding traders, ForexTB also offers the famous Metatrader 4, the most used investment platform in online trading.
In addition to the platforms, ForexTB offers additional support to its users starting from a trading course (ebook), which allows you to learn the basics of trading in a simple and technical way.
Further support is provided by the famous Trading Signals that ForexTB offers free to its users. These are very reliable operational signals found by Trading Central, which are sent automatically to the trader when the conditions for investing in a specific asset are present.
Buy Ferrari shares: Real-time quotes
Buy Ferrari shares: Analysis
There is a car manufacturer that will emerge unscathed from the coronavirus crisis… actually, it will emerge even stronger than before the epidemic. It seems impossible, but for Morgan Stanley analyst Adam Jonas, the company in question is Ferrari (RACE).
Let’s see why the Ferrari asset is reacting so well to this crisis.
Ferrari will generate a positive cash flow in 2020.
Jonas believes that the 2020 balance will be positive, around $ 150 million, while, according to analysts, almost every major auto maker in the world will lose billions this year.
New Ferrari models
Ferrari is launching four models in 2020: the SF90 Stradale, the 812 GTS, the F8 Spider, and the grand touring Roma model.
Ferrari Roma has a V-8 engine, which generates more than 600 horsepower and the price starts from $ 220,000. Two other models will arrive in 2021, according to Jonas.
The new products should push the new demand, regardless of the economic situation which, as we know, will not affect the large estates, i.e. the customers who can afford a Ferrari.
This is not an obvious advantage, but some new F1 rules have been blocked until 2022; therefore keeping costs down.
This saves Ferrari money in the short term.
“The Ferrari brand is more current than ever,” Jonas wrote in a recent report. In addition to racing, there are numerous licensing opportunities in the future and there is a new generation of Ferrari enthusiasts who focus on eSports.
Ferrari pays an annual dividend of $ 1.23 per share, with a dividend yield of 0.77%.
The company has increased its dividend for the past 3 consecutive years by an average of 21.61% annually. Ferrari pays 29.57% of its earnings as a dividend.
Ferrari: The competing companies
The company has strong competitors that cannot affect the strength of this brand, but that can threaten future sales. The main ones are:
- Tesla, which only produces electric cars but is very attentive to performance.
- BMW, which in addition to the sports cars of the Bavarian house also owns the legendary Rolls Royce brand.
- Daimler, that offers very competitive sports cars with the Mercedes AMG brand.
- Volkswagen, which with the brands Porsche, Lamborghini, Bugatti, and Bentley is probably the most feared competitor for Ferrari.
Is it worth to buy Ferrari shares?
Ferrari actually missed the earnings estimates this year; nevertheless, the stock went up by 7%. Weak earnings in the first and second quarters of the year are no surprise. After all, Italy was one of the most affected countries by the Covid-19 epidemic.
Ferrari production was stopped for seven weeks and the company’s management faced a very complicated restart. But thanks to its good organization and not too large size, the company managed to move with more agility than its “bulkier” competitors.
Among other things, Ferrari is a luxury goods company as much as a car manufacturer, and its target customers can still afford purchases of a certain type despite the crisis.
So yes, buying Ferrari shares is convenient, at least according to the main analysts and technical analysis forecasts.
Buy Ferrari shares: Forecast
It appears that investors remain confident that the wealthier consumers will continue to spend.
Ferrari equities are down about by 5% since the beginning of the year, with slightly better results than the comparable ones of the Dow Jones Industrial Average and the S&P 500.
But the forecasts of the main analysts are all positive and, among them, Jonas estimates that the Ferrari stock will return to $ 180 (January 2020 levels) by the end of the year.
Buy Ferrari shares: Target price
As we said, the main analysts have issued positive ratings for the Ferrari stock.
The twelve-month average target price is $ 171.30, suggesting that the stock may grow by 6.74% within a year.
The widespread sentiment regarding Ferrari shares is positive, investors and analysts agree that “the rich” will continue to buy cars and luxury goods even during the crisis; therefore, the demand for the Ferrari cars will not suffer major shocks .
If you consider buying Ferrari shares, always keep in mind the time horizon of your investment: In the short and medium term, the asset is considered a good investment, while in the long run, analysts have different opinions.
Once the strategy has been chosen, you must select the broker suitable for the investment. We recommend that you only use intermediaries with a regular license, safe, and reliable.
To practice and avoid any risk, start with a free Demo account. In this way, you can test strategies and trading platforms using virtual money.
- Practice the eToro Demo account for free by clicking here
- Register for free on ForexTB and access the Demo account from this link
- Access the Plus500 Demo account for free from this link
The best way to buy Ferrari shares is to use online brokers that offer CFDs without commissions.
eToro is the most convenient online broker for investing in Ferrari shares. It also offers an automatic investment system called Copy Trading.
Sure. Major analysts expect positive ratings for the Ferrari stock.
The target price for the 12-month Ferrari stock is $ 171.30 per share.