Morgan Stanley Turns Bullish on Ferrari

Morgan Stanley believes the recent sell-off in Ferrari shares has created an attractive buying opportunity.

Analyst Edouard Aubin upgraded Ferrari to Overweight from Equal Weight and increased his price target to €380 per share from €330, implying roughly 24% upside from current levels.

The upgrade comes after Ferrari stock lost approximately 26% of its value over the past year following investor concerns surrounding the company’s electric vehicle strategy and the launch of the Luce, Ferrari’s first fully electric model.

According to Morgan Stanley, the stock decline appears excessive relative to the company’s actual earnings outlook.

Luce Sparks Controversy

Ferrari’s recently unveiled Luce EV generated intense debate among enthusiasts and investors.

Critics argued the vehicle lacks many of the characteristics traditionally associated with the Ferrari brand, including the emotional appeal of a high-revving combustion engine and the visceral driving experience that has defined the company for decades.

The polarizing design and concerns about Ferrari’s transition toward electrification contributed to weakness in the stock.

However, Morgan Stanley argues that while concerns about the Luce are legitimate, they do not amount to a permanent threat to Ferrari’s long-term brand value.

Business Fundamentals Remain Strong

Despite negative sentiment surrounding the Luce, Ferrari’s financial performance remains exceptionally strong.

The company continues to generate profit margins approaching 40%, among the highest in the global automotive industry.

Consensus earnings forecasts for 2026 and 2027 have been reduced by only about 4% over the past year, suggesting that the stock’s sharp decline has been driven primarily by multiple compression rather than a deterioration in operating performance.

Morgan Stanley’s dealer checks across Europe and the United States found little evidence that Ferrari’s brand appeal has weakened.

Demand remains particularly strong for limited-production models, special-series vehicles, Icona products, and collectible supercars.

Scarcity Remains Ferrari’s Competitive Advantage

A central part of Morgan Stanley’s investment thesis is Ferrari’s ability to maintain scarcity.

Unlike traditional automakers that seek to maximize production volumes, Ferrari intentionally limits output to preserve exclusivity, pricing power, and long-term residual values.

The bank views Ferrari’s recent decision to moderate volume growth not as a weakness, but as a strategic move designed to protect the luxury status of the brand.

This scarcity continues to support strong demand among affluent buyers who view Ferrari vehicles as both lifestyle purchases and collectible assets.

Benefiting from the Wealth Gap

Morgan Stanley also highlights Ferrari as a beneficiary of the so-called “K-shaped economy,” where wealth growth remains concentrated among high-net-worth individuals.

According to research cited by the bank, the global population of individuals with net worth exceeding $30 million is expected to grow by approximately 33% between 2026 and 2031.

That expanding customer base could provide a significant demand tailwind for Ferrari, which delivered only 13,600 vehicles in 2025 and sells most of its production to existing customers.

Some wealthy investors are increasingly allocating gains from financial markets into scarce physical assets, including collectible Ferrari vehicles.

Upcoming Catalysts

Ferrari plans to introduce four new models during 2026, with several unveilings still ahead following the launch of the Amalfi Spider.

Morgan Stanley believes successful launches focused on Ferrari’s traditional strengths—including exclusivity, heritage, and emotionally engaging powertrains—could shift investor attention away from concerns surrounding the Luce.

The bank acknowledges risks remain, including weaker-than-expected EV demand, declining hybrid vehicle resale values, and broader economic uncertainty.

Nevertheless, Morgan Stanley believes Ferrari’s valuation now reflects many of these concerns and offers an attractive risk-reward profile for long-term investors.

Confidential Advisory: This article is for informational purposes only and should not be considered investment, financial, legal, or tax advice. Investors should conduct their own research and consult qualified professionals before making investment decisions.