Ferrari Cut to Sell at Citi

Citi analysts slashed Ferrari's (NYSE:RACE) rating to Sell from Neutral due to valuation concerns. The bank appreciates Ferrari's high quality and growth potential but believes the current valuation is too high. The price target has been increased to €329 from €308, reflecting slight adjustments in earnings forecasts and long-term capital expenditure expectations. However, this target remains 15% below Ferrari's current share price.

The analysts find it challenging to justify a Neutral rating, which would suggest a price target of nearly €400. Despite acknowledging the possibility of being premature in this assessment, especially in a market favoring "quality" stocks, the analysts cited Ferrari's 30% price increase since December and its trading at nearly 12x sales and 57x fiscal 2024 PE as reasons for the downgrade to Sell.