Investing.com -- Barclays downgraded Ferrari (NYSE:RACE) to Equal Weight from Overweight on Wednesday, citing valuation concerns and investor skepticism over the quality of its earnings beat and 2025 guidance.
The firm maintained its €485 price target on the stock, which they said now leaves limited upside following the stock’s 8% post-earnings rally.
“RACE beat Q4’24 by +7% and exceeded the ’bar’ for its 2025 guide with a >€2.03bn EBIT ’floor’," Barclays (LON:BARC) wrote, adding that some investors remain skeptical about the sustainability of the beat and Ferrari’s guidance.
While Ferrari’s record-high revenue per unit (RpU) of €443k benefited from strong pricing and mix, the bank noted that a significant portion of the Q4 outperformance came from the ‘Others’ segment, including strong sponsorship earnings, which some investors view as ‘lower quality’ earnings.
Barclays acknowledged that Ferrari’s initial 2025 guidance—≥€7bn revenue and ≥29.0% EBIT margin—exceeded expectations, but some analysts question the lower-than-expected D&A guidance of €650m versus €900m in CapEx.
Barclays also pointed to ongoing concerns regarding residual values, particularly for the SF90 model in the UK, which has seen a -23% drop in resale value compared to new regional MSRP.
With Ferrari planning six new model launches in 2025, including its first fully electric vehicle in October, Barclays believes that the success of these releases, particularly in terms of pricing power and order book strength, will be critical for investor confidence.
While the firm remains 6% above 2025/26 consensus EBIT estimates, it sees limited upside potential until Ferrari proves it can maintain pricing power amid residual value concerns.
“The order book remains impressive with 2026 ’fully covered,’ but it will be difficult to prove the critics wrong until the first few of the 2025 launches demonstrate strong pricing and an ability to build up a strong order book quickly,” Barclays noted.