RACE Should I Buy
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Ferrari NV (RACE) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company demonstrates solid financial performance, positive analyst sentiment, and hedge fund interest, the technical indicators suggest the stock is currently overbought. Additionally, the pre-market price is down, and options data indicates bearish sentiment in the short term. Given the user's impatience and unwillingness to wait for optimal entry points, holding off on buying now is recommended.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is at 86.857, signaling the stock is overbought. Moving averages are converging, suggesting indecision. Key resistance levels are at R1: 381.562 and R2: 397.02, with the stock trading near these levels. The stock has a 70% chance of declining in the short term, with a projected -4.2% drop in the next day and -4.98% in the next month.
Hedge funds are significantly increasing their positions, with a 353.70% rise in buying activity over the last quarter.
Ferrari's hybrid vehicles now account for 43% of shipments, with the first full-electric vehicle expected this year, showcasing innovation and market adaptation.
Analysts have raised price targets recently, with RBC Capital setting a high target of EUR 430 and maintaining an Outperform rating.
Ferrari's Q4 financials showed strong profitability, with adjusted EBITDA up 8.9% YoY and operating cash flow at 519 million euros.
The RSI indicates the stock is overbought, suggesting a potential pullback.
Options data shows a bearish sentiment, with a high Option Volume Put-Call Ratio of 2.
The stock is projected to decline in the short term, with a 70% chance of a -4.2% drop in the next day.
Pre-market price is down by -1.49%, reflecting weak sentiment.
Ferrari's Q4 2025 financials showed revenue growth of 3.83% YoY to $1.802 billion. Net income dropped slightly by -0.84% YoY to $381 million. EPS remained flat at 2.14, while gross margin improved to 51.89%, up 3.37% YoY. The company raised its FY25 net revenue growth forecast to 7.1%, reflecting confidence in its product mix and cost management.
Analysts have a generally positive outlook on Ferrari. RBC Capital raised its price target to EUR 430 and maintained an Outperform rating. Citi upgraded the stock to Neutral from Sell, citing improved earnings management. Jefferies raised its price target to EUR 310, noting investor enthusiasm following FY25 earnings. However, some analysts, like BofA and UBS, have lowered price targets due to cautious delivery strategies and investor skepticism.
