Ferrari SpA designs and manufactures sports cars. The Company offers new and pre-owned vehicles, repair services, warranty programs, financial services, and a variety of apparels. Ferrari participates in formula racing events and serves customers worldwide.
RACE Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for RACE, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Ferrari NV ranked in the 48th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 17%. In terms of the factors that were most noteworthy in this DCF analysis for RACE, they are:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 95. Notably, its equity weight is greater than 92.19% of US equities in the Consumer Cyclical sector yielding a positive free cash flow.
The business' balance sheet reveals debt to be 5% of the company's capital (with equity being the remaining amount). Approximately only 16.92% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
RACE's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than 51.72% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as RACE, try GT, PSO, TPCO, RL, and BBGI.