Why Ferrari Stock Is Worth 12 Times More Than Tesla: Status
Société Générale analyst Stephen Reitman upgraded shares of iconic auto maker Ferrari to Buy from Hold and increased his price target by almost 30% to $183 a share.
Ferrari isn’t like other auto makers. It behaves more like a luxury-goods stock, trading for 35 times estimated 2020 earnings, far better than the 9.7 times multiple for the Russell 3000 Auto & Auto Parts Index.
Of course, it could also be argued that Ferrari is more than a car. It is a status symbol. The car maker, by some measures, is worth more than 580 timesFord and more than 12 times another highly valued luxury auto maker:Tesla.
The Italian company illustrates the benefits of pursuing and up-up market strategy—selling a limited number of ultrahigh-end products to the superrich.
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