Morgan Stanley upgraded Ferrari stock to Overweight and raised its price target from $330 to $380 [1].
The move signals a shift in investor sentiment following a period of volatility triggered by the debut of the company's first electric vehicle. While the market initially reacted negatively to the car's aesthetics, the upgrade suggests that the long-term financial outlook remains strong despite fan criticism.
Ferrari unveiled the Luce EV at an event in Rome last month [2]. The vehicle carries a price tag of $636,000 [4]. Following the reveal, the stock experienced a sell-off as some critics and enthusiasts reacted poorly to the polarizing design of the car [3, 5].
Morgan Stanley analysts said the market overreacted to this design criticism, leading to an unjustified decline in share price [3, 5]. The bank's new price target of $380 represents approximately 24% upside [1].
The upgrade had an immediate impact on the company's valuation. Ferrari shares rose 3.93% in Milan trading after the announcement [1]. The company's stock is traded on the New York Stock Exchange under the ticker RACE and in Milan [2, 3].
Analysts at the bank said the sell-off had gone too far, suggesting that the intrinsic value of the brand outweighs the temporary controversy surrounding the Luce's visual appeal [2, 3].
“Morgan Stanley raised Ferrari’s price target to $380 from $330”
This upgrade highlights the tension between brand purists and institutional investors. While luxury car enthusiasts may disagree with a new design direction, Morgan Stanley's analysis suggests that Ferrari's pricing power and the high entry cost of the Luce EV—over $600,000—ensure profitability regardless of aesthetic controversy. The move indicates a belief that the company's transition to electric power is a fundamental growth driver that the market temporarily undervalued.
