Ferrari has confirmed its breakout, and is set to move much higher. The first price target of our Ferrari stock forecast for 2022 comes in at 325 USD. Our most bullish target which may not be hit in 2022 but only one year later will be close to 500 USD. Our Ferrari stock forecast is one of the few forecasts about individual stocks.
Ferrari produces dream cars.
As of 2025 Ferrari will also have EV dream cars.
And that’s starting to be reflected on its price chart: RACE has a textbook gorgeous momentum chart.
Going into 2022 Ferrari also has a dream chart.
Ferrari bullish forecast driven by several macro trends
Our Ferrari stock forecast for 2022 is bullish. It is based on a few macro and micro trends:
- The EV space is on fire.
- EV is one of the few mega trend of this decade as explained in great detail in Which Is The Biggest Investing Opportunity Of This Decade.
- Ferrari as a key player in the space of luxury cars is benefiting from increased demand (mega trend).
- Ferrari has a beautiful chart with a strong breakout which is confirmed as 2022 kicks off.
Essentially, there are multiple macro trends working concurrently to the benefit of Ferrari. The stock RACE and the company Ferrari do benefit from this, and that’s what we see on the weekly chart featured below.
Ferrari entering the EV space
It was pretty interesting when EV stocks were going through the roof (November 2021) but Forbes came with this article: Here’s Why Ferrari—Not Tesla—Is Morgan Stanley’s Favorite Electric Vehicle Stock
Morgan Stanley called Ferrari their “favorite electric vehicle stock” and said the firm’s market capitalization of about $60 billion “assigns little to no value” to the company’s electric vehicle business, which is expected to start selling cars in 2025. Morgan Stanley expects Ferrari’s electric vehicles to make up more than 30% of its total vehicle sales by 2030, and set a one-year target of $265 for the company’s stock, about 9% above current prices; the Italy-based manufacturer sold about 9,100 cars last year.
Interestingly, valuations are beyond imagination in the EV space. We are talking triple digit Price/Sales valuations. It seems to be normal.
With a P/S of 16x and P/E of 76x we believe Ferrari is priced high when compared to traditional sectors. However, in the car and especially the EV space it is normal to ‘cheap’. Don’t quote us on this, we believe it’s crazy, but it is a factual observation!
Ferrari stock forecast for 2022
RACE did break in the first week of November.
This is a quote from our premium service Momentum Investing alert:
We have been tracking Ferrari closely for many months, we did not have cash to open Ferrari in October when it started breaking out. This stock should go to the 320 USD area, and in the very best case even higher. This all started since Ferrari announced its very first EV car to come out in 2025.
The chart says it all: the first target for RACE is 320 USD, the median line of this 5 year rising channel. It is a target that will be hit early 2022. That’s why our base case Ferrari stock forecast for 2022 is 320 but longer out we should see (much) higher prices.
Note that this chart is absolutely beautiful. We explained recently in our successful investing series that Beauty Results In Profitable Investments. The RACE chart is a textbook example of this success principle.
Ferrari’s most bullish price target
If, and that’s a big IF, Ferrari succeeds in clearing the median line we expect the top of the channel to be hit. This would imply a 500 USD stock price for Ferrari. Again, that’s a big IF.
When can Ferrari hit this 500 USD price target?
Well, first of all, it is not yet a target, it is a projection. We need to understand how this stock will react once it hits the first target of 320 USD. Depending the setup of the chart but also the macro trends outlined in the intro of this forecast we can turn this projection into a forecast.
We can reasonably expect 500 USD to be hit IF there is a soft reaction AND a bullish reversal after the first target 320 USD is hit.
