Ferrari: decline continues, Jefferies cautious
(CercleFinance.com) - Ferrari's share price continued to fall on Friday and is poised to end a week in the red, while analysts at Jefferies, who initiated coverage of the stock at 'hold', consider its potential for growth to be increasingly limited.
At around 4:50 pm, the Italian luxury carmaker's share price was down 1.4%, bringing its decline for the week as a whole to almost 7%.
The share price had fallen by almost 5% in Tuesday's session alone, as investors expressed their disappointment at the group's failure to raise its targets after a better-than-expected first quarter.
This morning, Jefferies began coverage of the stock with a 'hold' recommendation and a price target of 375 euros, believing that current prices incorporate a large part of the group's favorable outlook.
In a note dedicated to the ultra-luxury market, the analyst points out that Ferrari, alongside Hermès and Brunello Cucinelli, is one of what he calls the "Magnificent Three", stocks that have seen their share price rise by an average of 23% over the last 12 months, compared with a 12% decline for the luxury sector as a whole.
Jefferies explains this dynamism by the steady increase in the number of millionaires worldwide, which has grown by an average of 7% a year since 2000, compared with average growth of 3.1% for global GDP over the same period.
The American broker's caution contrasts with the comments of RBC, which today advises strengthening its position on the stock after its recent lows, raising its price target from 463 to 464 euros, with an opinion maintained at 'outperform'.
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