Ferrari (RACE) shares fell Monday after Goldman Sachs slashed its rating on the Italian producer of luxury sports cars to sell from buy and cut its price target to $207 from $227.
Goldman analyst George Galliers based his move on fundamentals.
“Ferrari’s recent share price rise has largely been driven by positive earnings evolution and consensus revisions,” he wrote in a commentary.
“With the company having deferred its 2022 [earnings before interest and taxes] target to 2023, and Visible Alpha Consensus Data already 12% ahead of the now 2023 EBIT target, we see scope for positive earnings revisions as limited.”
Ferrari stock recently traded at $203.46, down 3.7%. It has climbed 7% over the past month.
While “we expect the broader auto industry to benefit over the next 12-18 months from a sequential improvement in global production, … we do not expect Ferrari to be a notable beneficiary of this development,” Galliers said.
Thus, “We reduce our shipment forecasts for Ferrari for 2021/22/23 by 400/530/1,110 units respectively,” he said.
“We no longer assume that Ferrari will look to catch up all the volume that was lost last year as a result of the COVID-19 production disruption.”
Last week, Ferrari named Benedetto Vigna, an executive at STMicroelectronics (STM) , Europe's largest semiconductor maker, to the post of chief executive. He will succeed Louis Camilleri, who stepped down in December for personal reasons.