Morgan Stanley Upgrades Ferrari (RACE) Stock With 24% Upside Target

Key Highlights

• Morgan Stanley elevated Ferrari (RACE) to Overweight from Equal Weight with a price target increase to €380 from €330
• Shares rallied 4.4% in Milan during Monday’s session after the rating upgrade
• Despite a 26% decline over twelve months, earnings projections decreased only 4%
• U.S. and European dealer surveys by Morgan Stanley revealed no permanent brand erosion
• Wall Street’s average price target stands at €377.88, suggesting 23% potential upside, with 23 Buy ratings and 6 Hold ratings

Shares of Ferrari (RACE) surged 4.4% during Monday’s trading session in Milan after Morgan Stanley elevated its rating on the luxury Italian carmaker to Overweight from Equal Weight, simultaneously boosting its price objective to €380 from €330 — representing approximately 24% potential appreciation from Friday’s closing level.

Ferrari N.V., RACE

The rating enhancement arrives following a challenging period for shareholders. The stock has surrendered approximately 26% of its value over the trailing twelve months, while Wall Street’s consensus earnings projections for the 2026-27 period declined by merely 4% during that same timeframe.

Morgan Stanley characterized this divergence as a significant disconnect. The research team, headed by Edouard Aubin, noted that the share price decline “has been driven partly by negative earnings revisions, but primarily by multiple compression.”

Essentially, the market has been reducing the stock’s valuation multiple at a rate disproportionate to the actual performance of the underlying business.

The anxiety fueling that devaluation had legitimate roots. Market participants had grown concerned about the more modest expansion roadmap presented during Ferrari’s October 2025 capital markets event, weakening residual valuations for plug-in hybrid models including the 296 and SF90, and ambiguity surrounding the Luce — Ferrari’s inaugural fully-electric offering.

Morgan Stanley conducted on-the-ground research. Conversations with dealer networks across the United States and Europe yielded predominantly positive feedback.

Secondary Market Values Showing Signs of Recovery

Resale valuations were identified as the critical variable influencing stock performance. Intelligence gathered from dealerships suggested the 296 GTB is now trading at or close to its bottom, with secondary market transaction volumes increasing. SF90 Coupe and Spider valuations similarly appear to be finding support following a substantial downward adjustment.

The analysts believe the most severe pressure on this issue has likely concluded.

Regarding the Luce, dealer sentiment ranged from lukewarm to pessimistic in the immediate term. Critiques centered on the styling, the €550,000 Italian launch pricing, and uncertainty about the intended customer demographic.

However, Morgan Stanley contended that the subdued response is already reflected in current valuations. The firm emphasized that Ferrari’s disciplined production approach “can limit any brand damage while leaving option value with new clients.”

The investment bank additionally observed that Ferrari’s transition toward electrification has reignited collector demand for vintage combustion-engine vehicles, which it views as beneficial for overall residual-value dynamics.

Wealth Concentration Trends Support Long-Term Demand

Morgan Stanley highlighted Ferrari’s customer base concentration among ultra-high-net-worth individuals as a foundational strength for the marque. Real estate advisory firm Knight Frank forecasts the worldwide UHNWI population will expand by roughly 235,000 individuals between 2026 and 2031, with the United States representing approximately 58% of that growth.

The bank reduced its weighted average cost of capital assumption to 7.5% from 8.1%, reflecting increased conviction in Ferrari’s sustained demand profile. Fiscal year 2027-2030 earnings forecasts were lifted by an average of 2%.

Among 29 analysts covering the stock, the consensus recommendation remains Buy, with 23 Buy ratings and 6 Hold ratings. The mean 12-month price objective currently sits at €377.88, implying roughly 23% upside potential from the June 12 closing price.

The post Morgan Stanley Upgrades Ferrari (RACE) Stock With 24% Upside Target appeared first on Blockonomi.