UBS: Ferrari is going to be boosted by 'super margin cars' (RACE)

pulse

May 3, 2017 5:26 PM

One analyst thinks that Ferrari stock has more room to run.

Chairman of Fiat Chrysler Automobiles and CEO of Exor, and Piero Ferrari, son of Ferrari Automotive Company founder Enzo Ferrari and Vice Chairman of the company, pose with a Ferrari outside the New York Stock Exchange after Ferrari's IPO on October 21, 2015.

Shares of supercar manufacturer Ferrari have been racing higher ever since the company's January 2016 IPO. The stock is up 71.4% and one analyst thinks it has more room to run.

In a note circulated to clients on May 2, UBS equity analyst Michael Binet reiterated his "Buy" rating on the stock and raised his price target from $74 to $85.

Ferrari

Looking past 2017, Binet said that Ferrari will be able to beat this year's impressive sales numbers with the addition of the Ferrari California relaunch and the continued success of higher production volume vehicles like the 488.

Binet also said that future earnings will be boosted with the edition of more special addition supercars, which carry "super margins." Many of Ferrari's special edition vehicles are only slightly different than preexisting vehicles so that means Ferrari can build them on preexisting platforms and sell them for more.

Binet told his clients looking ahead, expect Ferrari to begin rolling out cars with hybrid technology by 2019.

Click here for a real-time Ferrari chart.

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