Ferrari Shares Face Headwinds as HSBC Downgrades Rating

Ferrari N.V. shares (BIT.RACE), experienced a shift in market sentiment as HSBC downgraded its stock rating. The share price is 0.71% lower today at €320.90 on the news.

The downgrade by HSBC analyst Michael Tyndall moved Ferrari from a ‘Buy' to a ‘Hold' rating, with a price target reduction from €415 to €345. This adjustment reflects concerns about Ferrari's emphasis on product mix over volume, particularly during the crucial ramp-up phase of the 2026-2027 F80 model.

While shipments are expected to remain stable year-over-year, a projected 4% increase in revenue per unit, driven by the product mix, may not be enough to offset other challenges.

Headwinds such as increased industrial costs due to the rising Formula 1 budget cap and unfavorable foreign exchange rates are also contributing factors. HSBC projects a 29.2% adjusted EBIT margin for 2026, remaining flat year-over-year, with industrial free cash flow estimated at around €1.4 billion.

This downgrade aligns with a series of recent revisions from other financial institutions. Oddo BHF downgraded Ferrari to ‘Neutral' from ‘Outperform', decreasing the price target from €430 to €340. This adjustment was influenced by a revised delivery estimate of 200 units for the F80 model in 2026, down from the previously projected 250 units, anticipating a gradual increase through 2028. This cautious outlook reflects concerns about Ferrari's strategic management of its ultra-exclusive series to optimize financial results.

Morgan Stanley also adjusted its outlook on Ferrari, downgrading the stock to ‘Equal Weight' from ‘Overweight', with a price target reduction from $520 to $425. This decision was driven by Ferrari's strategy to limit volume growth through 2030, aiming to preserve brand exclusivity.

While this approach is viewed positively for maintaining brand allure, it is expected to result in more modest short- and medium-term growth, with top-line growth projected below 5% over the next three quarters. Investor concerns regarding the upcoming electric vehicle launch and potential impact on residual values further influenced this adjustment.

A Reversal from Previous Optimism

Interestingly, these downgrades contrast with HSBC's earlier upgrade of Ferrari to ‘Buy' on October 2, 2025, with a price target increase from €413 to €470. At that time, the optimistic outlook was based on expectations of double-digit earnings growth through 2030, driven by mix enrichment, expanding personalization, and efficiency gains. HSBC had projected an earnings CAGR of 11% through the decade, with EBIT margins rising to 32% by 2027.

While Ferrari's long-term brand strength and strategic initiatives remain important considerations, the recent analyst downgrades and revised forecasts suggest a more cautious market sentiment.