Ferrari seeks rebound after 'Luce case', approaches EUR 300 again

(Il Sole 24 Ore Radiocor) - Ferrari attempts to recover after the slide of the past few days, caused by the cold reception towards the 'Luce', theelectric model unveiled to the world last Monday. The stock is making good progress, driven by the words of the CEO, Benedetto Vigna, who on Thursday responded to the harsh criticism of the previous days. The stock is now approaching the EUR 300 mark again, after having slipped in recent days to a low of EUR 283.

The CEO of the Maranello-based carmaker said that the Luce has appealed to both historic and new customers, in spite of the wave ofcriticism even from prominent figures such as former Ferrari president Luca Cordero di Montezemolo, Alpine team principal Flavio Briatore, and politician with a past at Ferrari, Carlo Calenda, as well as memes that have appeared on social media mocking the electric model. "There is a strong interest, we will give the order numbers in the next conference call,' he said confidently, explaining further that Luce is a disruptive, innovative car and therefore does not pretend to be understood by everyone. He also responded to those who pointed the finger at the excessively high price (the base is 550,000 euros), stating that 'innovation must be made to pay'.

The speech shook people's spirits and so the shares started to climb the slope, also benefiting from positive judgements from sims and business houses. For example, Intermonte decided to reiterate 'Outperform' on the shares of the Cavallino, with a price target of 417 euro. "We read positively the indications on the first orders, which suggest a response from customers, both existing and new, better than what is perceived by the market". The sim, among other things, believes that 'Luce' represents a long-term strategic project, capable of exploiting the technological opportunities offered by the new engines. The real risk lies in the positioning of the model within the portfolio, should the 'Luce' be configured not as an incremental addition, but as a replacement for successful, more traditional models. This hypothesis was ruled out on Thursday by Vigna himself.

Barclays also confirmed its 'Outperform' recommendation with a €355 price target on Ferrari, while admitting that it does not like Luce's design. The experts did, however, appreciate the courage of tackling the innovator's dilemma head-on. They even quoted Theodore Roosevelt's famous line in the Ferrari report that 'it is hard to fail, but it is worse never to have tried to succeed'. In short, they argued, 'we don't believe that Ferrari should be everything to everyone. We believe that there is room for the romantic analogy of craftsmanship, especially in an increasingly digital world, but we also recognise that the segment of very high net worth luxury car buyers is evolving and becoming much more diverse'. For Barclays, therefore, the reaction of the past few days with the 9% slide in the value of Ferarri's shares was excessive.

In the meantime, the market awaits two new highlights for June: as Vigna said, at the end of next month the company's plans in the world of sailing will be unveiled. The countdown to Sunday 7 June, when theMontreal Grand Prix, where Charles Leclerc will 'play' at home, has also begun. Meanwhile at the Montreal GP Lewisss Hamilton made the Ferraristi rejoice by taking second place on the podium.