Research note · 2026-07-15 · 24 to 48 months horizon · conviction: Medium
RACE · Ferrari
LONG
Hermès with an engine: Ferrari caps production below demand and sells scarcity, earning luxury-goods economics the market still half-prices as an automaker.
Situation
Ferrari deliberately limits production to roughly 14,000 cars a year — below demand — which generates luxury economics: 25%+ EBIT margins, a multi-year order book, and pricing power closer to Hermès than to any carmaker, on ~€7B of revenue.
Complication
The market debates whether Ferrari's luxury-like multiple (40x+) survives the EV transition, and whether a China or US luxury slowdown dents the order book. The bear case is simple: 'it's still a car company.'
Thesis
1. Scarcity is the moat
Capping volume below demand means pricing, mix, and brand — not units — drive growth, and the multi-year order book insulates revenue from the macro cycle. Ferrari chooses to under-supply, which is the entire point.
2. Mix and personalization compound margins
Bespoke options and limited-edition series carry extraordinary margins, and each model cycle lifts average selling price without adding a single unit of volume. The customer, not the factory, funds the growth.
3. EV is an opportunity, not a threat
Ferrari can charge for exclusivity regardless of powertrain. A limited, high-priced EV extends the brand to a new occasion rather than commoditizing it — the opposite of the mass-market EV squeeze.
Catalysts
| Window | Event |
|---|---|
| 6 to 18 months | New model launches at higher average selling prices |
| 12 to 36 months | First EV reception and its pricing/positioning |
| 6 to 24 months | Personalization revenue mix and margin-guidance raises |
Risks and mitigants
| Risk | Mitigant / monitor |
|---|---|
| A luxury demand cycle (China / US) softening the order book | A multi-year backlog and waitlist provide unusual revenue visibility; brand desirability has historically been defensive |
| The EV transition diluting brand equity | Managed through scarcity and pricing rather than volume — the model never depended on the engine, only on exclusivity |
| A simple DCF badly under-values the brand | The 5-year DCF is treated as a conservative floor; like Hermès, Ferrari's pricing power compounds beyond a five-year window, so the thesis leans on comps and quality, not the model alone |
What I am watching
- Shipments (deliberately near-flat) vs. pricing and mix
- Order book length (quarters of visibility)
- EBIT margin
- Personalization revenue mix
Valuation
Comparable multiples
| Ticker | Company | P/E | EV/EBITDA | Rev growth | Note |
|---|---|---|---|---|---|
| RACE | Ferrari | 45 | 25 | +11% | Priced between luxury and autos — the re-rating is toward luxury |
| RMS | Hermès | 48 | 32 | +12% | The scarcity-and-pricing-power analogue Ferrari deserves |
| MC | LVMH | 24 | 14 | +5% | Broad luxury comp, more cyclical exposure |
| P911 | Porsche AG | 14 | 8 | +4% | The automaker multiple Ferrari is escaping |
Author estimates as of July 15, 2026 — verify against live data before relying on multiples.
Price targets
Interactive DCF
Sensitivity: implied value per share (WACC × terminal growth)
| WACC \ g | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|
| 7.0% | $220 | $242 | $269 | $304 |
| 7.5% | $198 | $216 | $237 | $264 |
| 8.0% | $180 | $195 | $212 | $233 |
| 8.5% | $165 | $177 | $191 | $208 |
| 9.0% | $152 | $162 | $174 | $188 |
| 9.5% | $141 | $149 | $159 | $171 |
| 10.0% | $131 | $138 | $147 | $156 |
Green cells imply 5%+ upside to the current price, red cells 5%+ downside. Adjust the inputs above; the grid recomputes live.