RACE
Ferrari N.V.
$383.40
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 419.6% above fair value
You pay
$383.40
Bear
$54.37
Fair
$73.78
Bull
$93.20
Bear
$54.37
-85.8%
$7.77 × 7x
Fair
$73.78
-80.8%
$7.77 × 10x
Bull
$93.20
-75.7%
$7.77 × 12x
Adjust Assumptions
9.5x
7.77$
Key Value Driver
Through-cycle normalized EPS ($7.77)
Implied Market Multiple
49.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$462.75
Divergence from AlphaVal
84%
Summary
Using 7-year normalized EPS of $7.77 at a 10x cycle multiple, the base-case value is $73.78 per share. P/TBV cross-check: 40.4x.
Warnings
Price-to-book value of 40.4x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
This company has heavy ongoing investment costs. Valuation shortcuts that ignore those costs can make the stock look cheaper than it really is.
Wall Street's average price target is $462.75 (from 19 analysts). Our estimate is 84% below the consensus -- consider that gap carefully.
Financial statements were converted from EUR into USD using EURUSD at 1.1256 USD per EUR.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing