Auto Show Announcements Put Ferrari On The Road To Upside Next Year

UBS’ Michael Binetti believes that the announcements made by Ferrari N.V. RACE at the Paris Auto Show pave the way for upside during 2017.

Binetti maintained a Buy rating on the company, while raising the price target from $53 to $60.

Pipeline Update

The analyst mentioned that the company provided a robust pipeline update at the recent Paris auto show, including the new Aperta supercar launch, the launch of a premium priced limited series for Ferrari’s 70th anniversary in 2017, as well as comments that the waitlist for the 488 is already 12-24 months.

“Aperta will be 200 units, fully pre-sold at €1.85m ASP. For the 70th anniversary, RACE will ship 250 units of its 5 current models with special detailing at premium ASPs,” Binetti elaborated, while adding that “RACE continues to innovate at the high end of the premiumization pyramid.”

Can Hit LT Target

The analyst believes the company already has the architecture to achieve its long-term target of 9,000 units per year, and expects Ferrari to ship the new Aperta in H2 2016, while expanding the 488 to all markets.

In 2017, the 488 is expected to be in full production, while the V12 Berlinetta is likely to get a refresh, while a small batch of super car might be launched for the 50th anniversary in Japan.

“In our view, potential to raise LFL prices could be a key source of upside to RACE’s EBITDA trajectory,” the analyst added.

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