A Work Project, presented as part of the requirements for the Award of a Master Degree in Finance from the NOVA – School of Business and Economics. AUTOMOTIVE INDUSTRY IN A BUSINESS MODEL REVOLUTION JOÃO MARIA ALVES 33898 JOANA ENCARNAÇÃO BENTO DA SILVA 33952 A Project carried out on the Master in Finance Program, under the supervision of: Nuno Vasconcelos e Sá JANUARY 2020 Automotive industry in a business model revolution Abstract The presented equity research report has the objective to determine the fair value of the Italian luxury performance car manufacturer Ferrari N.V. To achieve this, an in-depth analysis of the company’s business and industry in which it operates is conducted. Subsequently, a DCF valuation is performed based on the assumptions made to achieve the forecasted financials. The result is a share price of €200.05 as of January 2 2021, which represents an upside of 36% compared to the current price of €149.55 and implies a BUY investment recommendation. Keywords Ferrari, Fair value, Discounted cash flows valuation This work used infrastructure and resources funded by Fundação para a Ciência e a Tecnologia (UID/ECO/00124/2013, UID/ECO/00124/2019 and Social Sciences DataLab, Project 22209), POR Lisboa (LISBOA-01-0145-FEDER-007722 and Social Sciences DataLab, Project 22209) and POR Norte (Social Sciences DataLab, Project 22209). MASTER IN FINANCE FERRARI N.V. COMPANY REPORT LUXURY PERFORMANCE AUTOMOTIVE 3 JANUARY 2020 JOÃO ALVES, JOANA SILVA
[email protected] Automotive industry in a business Recommendation: BUY model revolution Vs Previous Recommendation - Price Target FY20: 200.05 € How Ferrari is adapting to current industry trends Vs Previous Price Target - Price (as of 3-Jan-20) 149.55 € § Industry: The luxury automotive industry is at a Thomson Reuters turning point.