Ferrari gets top rating from Bank of America
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Ferrari gets top rating from Bank of America

Bank of America Merrill Lynch (BoA) has updated its position on iconic car maker Ferrari, adding it to its US1 List. The US1 List is Bank of America’s collection of “best investment ideas” from its fundamental equity research. BoA is joining a number of other players who are beginning to see the added value in Ferrari’s stock – especially since its new CEO, Louis Camilleri, presented his strategic plan to 2022. For many analysts and investors, he struck precisely the right tone between hewing to his predecessor’s game plan and prioritising the exclusivity of the brand.

Ferrari’s share price has risen by 13% so far this year

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Source: Yahoo Finance

BoA analyst John Murphy wrote in a recent investment note to clients: "We continue to believe that Ferrari is an iconic asset, with strong growth prospects, which makes it a very attractively priced stock following the recent sell-off.” He noted that Camilleri “came through” when it came to maintaining former CEO, the late Sergio Marchionne’s, financial outlook, and that there was “another while leg of growth opportunity” beyond 2022, as the current plan doesn’t focus on the benefit of “SUV, CUV, Purosangue, or even a new hypercar.”

Murphy added that pressure on the company was “overblown” and its defensive business structure “has driven resilient financial performance even in times of economic crises.”

BoA joins French bank Societe Generale in professing confidence in Ferrari. Societe Generale recently raised its price target on the legendary supercar maker by almost 40%. Equity analyst Stephen Reitman explained the move succinctly. Praising the new CEO and the company’s strategy, he said: “the facts have changed and so we have changed our mind on Ferrari.”

Disclosure
Dominion holds Ferrari in its Global Trends Luxury Fund.


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