Analyst Adam Jonas of Morgan Stanley has predicted that Ferrari’s stock price will benefit as Ferrari moves to manufacture electric vehicles. Tesla shares hit another high on Monday trade but analyst Jonas still calls Ferrari his favorite stock. The luxury car maker has not even entered the electric vehicle space although it is expected to do so later this decade according to a report by Forbes.
Jonas’ weekend note to clients not only mentioned Ferrari as his “favorite electric vehicle stock” but also noted that the automaker’s market capitalization which is approximately $60 billion “assigns little or no value” to its electric-vehicle business. Ferrari is expected to begin selling electric cars in 2025.
Jonas predicts that by the year 2030, 30 percent of the cars sold by Ferrari would be electric vehicles. He also set a one-year target of Ferrari’s stock at $265. This is approximately a nine percent increase when compared with its present value. Last year the luxury automaker sold 9,100 cars.
Jonas explained that Ferrari had access to investment capital, its record two-year order backlog as well as its pricing power in the luxury car market and these were reasons for it to do well. It might take pole position in the electric vehicle market, in future.
Morgan Stanley predicted that Ferrari would spend a large part of its capital expenditures which amount to $13 billion to help the automaker develop battery-powered electric vehicles. Jonas believes that a roughly $400,000 electric vehicle from the Italian luxury carmaker will make a public debut in 2024.
However, analysts from Goldman Sachs have doubts about Ferrari’s go green plans. In June, they said that the transition created “uncertainty around potential future capital expenditure requirements.” They estimated that the expansion would drive up costs by $800 million this year, according to the report by Forbes.
Ferrari shares rose by percent on Monday and stood at $244. The stock has risen by seven percent in 2021, compared to 25 percent for the Standard and Poor 500 or S&P 500.
Source Forbes
