Here is a DD, fellow window lickers.
The Europoors have an investible asset for once.
The pride of the Italian construction worker & Dubai sheikh.
Ferrari: $RACE
The most profitable car company on earth by a % basis.
Its business model, demand dynamics, and customer behavior place it closer to Hermès than to any mass-market OEM. Hermès trades at roughly fifty times trailing earnings, while Ferrari trades closer to the mid-thirties at the moment.
Based on trailing EPS, a Hermès-level earnings multiple would imply a share price roughly sixty percent higher than current levels. The gap is not due to inferior fundamentals, but because the market still partially misclassifies Ferrari as an auto manufacturer rather than a luxury scarcity brand.
Ferrari’s demand profile is insulated from the typical macroeconomic pressures that affect the automotive sector. The company sells to high NW buyers whose purchasing power is not meaningfully impacted by interest rates, inflation, or consumer credit conditions. For their customers, availability, allocation, and status matter far more than financing rates or monthly payment considerations, . As a result, revenue stability, pricing power, and margins behave more like high-end luxury goods than cyclical vehicles.
Order books remain deep, consistently extending beyond two years. Even in cases where a model receives mixed feedback from enthusiasts, allocations sell out because buyers are playing a longer reputation game. Taking delivery of a less-desired model today increases the probability of earning a rarified allocation tomorrow.
This behavior mirrors the Patek Philippe model, where customers accept less sought-after references to build credibility with the brand, and where the real product being sold is not the object itself but the access.
Recent analyst downgrades tied to the rollout cadence of the F80 are reflective of short-term sentiment more than any deterioration in operational performance. Delivery expectations have shifted modestly on certain tranches, but projected units, mix, and pricing still support the broader earnings profile. F80 demand remains oversubscribed at the high end, and the release does not carry long-term revenue consequences. The temporary softness in sentiment is a function of modeling timelines rather than weakening fundamentals.
The tipping point for the recent stock slide was based on an underinvestment/production reduction in EVs. This should be positive with the current political climate. Regardless, who tf wants a EV Ferrari?
It should be easily priced at $500. The drawdown has stabilized with earning ahead, I’m looking for a meaningful push into the low 400 shortly.
Positions: 250k of shares 30k of Mar 20 360 Calls
