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This Luxury Brand Is Undervalued

Wall Street is looking at wide-moat Ferrari the wrong way, says Morningstar's Richard Hilgert.


Richard Hilgert: Wide-economic-moat-rated Ferrari trades on the New York Stock Exchange and the Milan exchange under ticker RACE. The stock currently trades at a 15% discount to our fair value estimate, which gives it a 4-star rating. This company has a wide economic moat because of the very strong, highly recognizable brand that comes from Ferrari, and that comes from its Formula 1 racing involvement for many, many years--a very rich heritage there.

The company does have negative point to it out in the Street currently where some analysts are calling this an automotive company that sells to the wealthy population. However, to us, calling Ferrari an automotive company is like calling Tiffany a glass company. 

Richard Hilgert does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.