Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee

Equity Research | April 19, 2016 | NYSE: RACE

NASDAQ: RACE Current Price: $44 Intrinsic Value: $58 Target Price: $73 Implied Return: 33%

Recommendation Company Proﬁle

Ferrari N.V. (RACE) offers highly exclusive and exotic experiences to the world’s wealthiest individuals. Ferrari is not a traditional automobile manufacturer. The business exhibits high margins, strong cash ﬂow, and low cyclicality. Its scarcity BUY and unique attributes justify a premium valuation to its peers. The turbulent IPO environment alongside international concerns provide an entry point to an incredibly strong brand undervalued by 33%.

Key Statistics Price Performance

Sector: Consumer Goods RACE S&P 500 12.5% Industry: Auto Manufacturer

Market cap: $7.86B 0%

52 week high: $60.97 52 week low: $31.66 -12.5%

Trailing P/E: 24.00x Forward P/E: 22.18x -25% P/S: 2.39x EV/EBITDA: 13.79x -37.5% Beta: N/A

ROA: 7.14% Nov Dec Jan Feb Mar Apr

Catalysts Investment Thesis

- New products Ferrari’s brand is among the strongest worldwide. Its unique - High-net-worth individual growth scarcity-driven supply means it has no inventory risk as demand greatly exceeds supply. Rising high-net-worth individual - Branding populations worldwide, especially in emerging markets will - Emerging markets support steady revenue growth.

- Stable cash ﬂows, low cyclicality - Undervaluation driven by IPO timing - Long-term pricing power with low Chinese exposure

Recommendation: BUY

Investment Thesis Breakdown

Reliable Non-Cyclical Business

While Ferrari’s products are considered luxury items, the end-market for its products is generally the ultra-wealthy that are able to continue spending during strained economic environments. Additionally, Ferrari is a brand that has been developed over the past 75 years through high-performance racing throughout the world. The brand, built upon the engineering excellence of its Formula 1 racing team, is licensed out to carefully selected luxury goods manufacturers in a variety of markets including apparel and accessories. As the population of high-net- worth individuals continues to grow worldwide, we expect Ferrari to continue their expansion of its brand image by providing unique experiences to the ultra wealthy.

Yearly Automobile Production 9,000

6,750

4,500

2,250

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Undervaluation From IPO

As Ferrari completed its IPO on October 21, 2015 at $55, the market was preparing a broad selloff that lasted through early February 2016. In November 2015, Ferrari reported its Q3 2015 earnings with mixed sales results. China reported -40% YoY Q3 unit sales while the United States and the United Kingdom reported a +30% increase. A changing product mix can also be attributed to the decline as the F12 Berlinetta, which is in its fourth year of production, declined -17%. Ferrari’s stock price was brought down with the selloff reaching a trough of $32 in February. The stock has since rebounded to a range of $40-$42. Since Ferrari is a unique pure play luxury automobile manufacturer with reliable revenue growth prospects, we expect the ﬁrm to rebound from this adverse environment with strong performance going forward and that the stock will reﬂect this as its pure play nature suggests its earnings growth will drive stock performance. Ferrari is not a traditional manufacturer compared to its peers because its peers are part of automobile conglomerates. Ferrari is a great opportunity to gain exposure to the high-growth luxury segment of the car industry with a powerful brand that is able to withstand the most adverse economic environments based on its scarcity value and prestige.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 2

Recommendation: BUY

Investment Thesis Continued

Zero Inventory Risk

Ferrari limits the production of its automobiles in order to Global YOY Sales Growth maintain the scarcity value associated with its products as Ultra Luxury Industry it refrains from diluting its brand. The firm’s demand greatly 50% exceeds its limited supply, which is why the average wait list surpasses one year and its ultra high-end offerings 37.5% requires unique connections and prestige in order to be invited to order. This results in a unique position as all of 25% Ferrari’s inventory is pre-paid and sold before it leaves the factory floor. Ferrari’s future profits are thus determined by the level a which management wants to produce versus 12.5% growing demand which most firms rely on to secure sales. The firm’s demand has remained largely stable throughout 0% the most adverse economic environments, providing guaranteed cash flows when they are needed the most. 2010 2011 2012 2013 2014

This represents tremendous pricing power that drives continued margin expansion. This was evident in 2013 when the ﬁrm produced 400 fewer automobiles while increasing revenues by 5% and proﬁts by 8%. In response to the tightening of supply, Ferrari’s wait lists bloated in 2014. This lead to management’s decision to increase its production by 350 automobiles. Ferrari has pledged to cap production to 10,000 units per year in order to maintain brand scarcity and expects to reach 9,000 units by 2019.

Emerging Market Growth

The ﬁrm’s biggest growth potential lies in the emerging EMEA Americas China Rest of Asia markets of the Middle East and Asia. In the case of the Middle East, oil price volatility has proven to be a headwind as much of the wealth in the region is closely tied to oil. 12% Although oil may remain a largely detrimental factor in Middle Eastern growth, any demand decrease in the region 9% will be covered by another region as net demand is 45% expected to remain positive through economic headwinds.

With net demand remaining positive through almost any emerging market headwind, emerging markets present only 34% a positive contribution to demand as any upside will contribute to the ﬁrm’s scarcity value and any downside will be covered by customers in other regions.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 3

Recommendation: BUY

Products

Automobiles

Ferrari shipped 7,664 sports car and grand tourer (GT) cars Sports Cars GT Cars Special Edition in 2015, which accounted for 72.9% of revenues. Prices 488 GTB California T F12 TDF ranged from $202,000 to $323,000 before options. Ferrari’s 488 Spyder GTC4 Lusso LaFerrari current lineup of cars includes Special Edition vehicles commanding prices of over $1 million. F12 Berlinetta

488 GTB Spider: Launched in March 2015, designed for track-level performance while being suitable for everyday use. Can accelerate to 200km/hr in 8.3 seconds.

California T: Launched in 2014, only Ferrari GT car with a retractable hard top, rear seats, and spacious trunk. Includes world’s only turbocharged V8 with variable boost management system for minimal turbo lag.

LaFerrari: Launched in 2013, Ferrari’s latest supercar commanding over $1 million includes hybrid technology to be Ferrari’s most powerful car ever. It’s V12 and dual electric engines give LaFerrari 963 horsepower.

Engines & Branding

Ferrari’s other lines of business include Engines, which Cars Engines Sponsorship & Brand Other creates customized high performance engines for Maserati and various Formula 1 teams. In the long run, a dramatic increase in sales for Maserati could provide a major source 3% 14% of revenue growth as Maserati continues to enter new markets and introduce new vehicles that include Ferrari’s engines like the new Levante mid-sized luxury crossover 10% SUV.

Sponsorship and Branding provide additional cash ﬂows to compliment their baseline automotive business. The 73% licensing of Ferrari has allowed organizations like Formula 1 to attach themselves to Ferrari’s long and successful racing franchise.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 4

Recommendation: BUY

Competitive Advantage

Brand Independence: Ferrari is the only publicly traded pure play luxury automobile manufacturer. Since the spin-off from Fiat Chrysler Automobiles, Ferrari can focus on implementing its branding and emerging market expansion without being dragged down with the rest of a diversified automotive conglomerate. In the past, Ferrari was the cash cow of Fiat Chrysler and stood to benefit the rest of the firm as much of Ferrari’s cash flows were used to facilitate the large debt of the parent firm. Presently, Ferrari can maintain a sustainable degree of debt on its books while focusing on utilizing cash for growth and dividend payments.

Formula 1 Prestige: Most Formula 1 teams including McLaren and Red Bull are trying to further their record and drive demand for their vehicles by winning championships. Ferrari does not have to worry about this, as it has not won a major Formula 1 championship in ten years, yet retains its best in class record spanning decades. As its competitors pump resources into research and development to win races, Ferrari has more modest investments into the space with a focus on developing technologies that is can include on its next super car.

Successful Branding Outlook: Ferrari is the most successful diversifier of its brand among its peer group. For years, the firm has licensed its brand to various outlets including clothing and accessories to boost revenues. Typically, firms diversify their business to accommodate downturns to their business, but Ferrari does so to exploit the selling power of the Ferrari brand to boost earnings with very little costs.

Competitor Analysis

Ferrari competes with a broad range of automobile manufacturers, from the lower end with Mercedes and Porsche, to the higher end with Lamborghini and Rolls-Royce.

In the luxury automobile space, it is less of value-added technologies and efﬁciency, and more about customer taste and design philosophy. Each ﬁrm in this space maintains its signature aesthetics to cater to a certain demographic, and rely largely on the reputation of the brand to sell units. Competitors Ferrari has built its brand from Formula 1 and maintains its Brand 2014 Units aesthetic qualities throughout its lineup. By being among the most sought-after names in the industry, Ferrari is able to build Lamborghini 2,600 its backlog and produce more automobiles than many Rolls-Royce 2,100 competitors while refraining from diluting its brand. Mercedes 13,500

In recent years, much of the growth observed in this space Aston Martin 3,204 has been from the Middle East and Asia as those economies Audi 2,150 continue to expand. Ferrari has low exposure to these markets as its domestic demand already outpaces its supply. Ferrari 7,086

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 5

Recommendation: BUY

Industry Analysis

Luxury Automobile industry Chinese Exposure Ferrari’s operates in the luxury automotive industry and with 30% main competitors including Lamborghini, Aston Martin, Bentley, Rolls Royce, and McLaren. Most of Ferrari’s competitors do not surpass 10,000 units sold a year and have 22.5% unit costs above $100,000.

Since its competitors are either private companies or are a 15% part of a conglomerate, Ferrari is a unique opportunity to buy into a pure-play, highly recognize brand. Additionally, pure- play brands tend to trade at a premium multiple in 7.5% comparison to conglomerates. The key point that differentiates luxury car brands from regular car brands is that 0% demand for luxury cars is usually higher than its supply. This Maserati Bentley McLaren Lambo Ferrari leads to most Ferrari customers being placed on waiting lists of one to two years. Given this excess of demand, companies 2008 - 2015 CAGR Growth like Ferrari control supply in order to maintain the level of Luxury cars Regular cars exclusivity that makes its products so sought-after, and thus produces very predictable cash ﬂows. China

Ferrari and its competitors grow shipments at lower rates to U.S. avoid brand dilution. Based on our research, super luxury goods are not immune to economic downturns. However, Middle East luxury items tend to withstand recessions well and bounce higher and more rapidly after an economic downturn Japan compared to regular goods. Since 2008, the luxury automotive market has seen high CAGR growth as economies S. Asia around the world rebound, and the population of high-net- worth individuals continues to grow. 0% 10% 20% 30% 40%

As this segment largely controls its output, the growth to its baseline business is limited to the output management allocates. Thus, ﬁrms in this space have begun to diversify their revenue streams in order to grow their business while maintaining the scarcity value of their products. The most popular outlet has been branding and licensing of the brand to OEMs and retailers, as the strategy has little cost and high potential for return.

Ferrari has been the foremost entrant into this space, and has successfully implemented a business model that allows it to grow revenues through licensing and merchandise to compliment their growing baseline business. Going forward, a larger portion of Ferrari’s revenues will come from this new space, leading to the ﬁrm becoming a diverse luxury portfolio versus solely a automobile manufacturer.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 6

Recommendation: BUY

Moat

Ferrari has a wide economic moat due to its prestigious Formula 1 Constructor Titles brand name and superior powertrain. The Ferrari name has 16 been synonymous with very fast and highly exclusive 12 sports cars since 1929 and has solidiﬁed its reputation by competing in Formula 1 racing as a constructor and 8 through its Scuderia Ferrari racing team. 4 Since 1958, Ferrari has won the most constructor titles in Formula 1 racing with 16, which is awarded to the 0 manufacturer of the powertrain that scores the most points Ferrari Williams McLaren Red BullMercedes Renault in a Formula 1 season. The prestigious brand name Ferrari has built through Formula 1 racing inspires demand for on- Formula 1 Driver Titles road Ferrari cars. Capitalizing on its prestigious brand 16 name, Ferrari seeks to be a low-volume manufacturer. 12 Demand for Ferrari cars outpaces supply because wait lists for some Ferrari cars can be as long as one to two years. 8 The combination of low supply, a strong brand name, and a high price tag allows Ferrari to maintain signiﬁcant pricing 4 power over its wealthy customers and generate gross margins above 50%. 0 Ferrari McLaren WilliamsMercedes Red Bull Renault

Ownership Structure

Ferrari is controlled by three entities: Exor S.p.A. with 24%, Average % of Companies Owned By Families Piero Ferrari with 10%, and the general public with 66%. Ownership held by Exor and Mr. Ferrari represent 34% of total shares representing 49% of total voting power. Italy

Concerns regarding voting power and control of the company should take into consideration the corporate France culture of Italy, and the long history of family-run enterprises. European ﬁrms, especially Italian, tend to have Germany highly concentrated ownership. Exor, which is the holding company of the family of Fiat’s founders has a long history of adding shareholder value through Fiat, and Piero Ferrari U.K. is a seasoned automotive executive with the continued success of his family’s ﬁrm in his best interest. 0% 15% 30% 45% 60%

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 7

Recommendation: BUY

Catalysts

New Automobiles

Ferrari builds supercars catering to the 1%. However, Ferrari also makes special edition versions of their original automobiles in addition to the Formula 1 inspired special editions. These automobiles fetch higher values as they are even more scarce. Ferrari typically releases a Formula 1 inspired special edition every decade, with the last four iterations illustrated to the right in descending order. Ferrari entered the “hypercar” market with the LaFerrari, selling out of the 499 pre- orders.

These automobiles represent Ferrari catering to the higher echelon of the 1% willing to spend well over $1 million on an automobile. Ferrari generates larger proﬁts on sales of limited edition supercars with margins as high as 50%. As Ferrari continues to produce these limited edition vehicles to compliment their baseline business, we expect modest margin expansion over our investment horizon. These offerings add to Ferrari’s scarcity value as they sell out before they are announced to the public, requiring connections to be invited to pre- order.

High-Net-Worth Individual Growth

The population of high-net-worth individuals could grow more quickly Global HNWI Population than expected. The global population of high-net-worth individuals has 15,000 been growing strongly, at roughly 10% CAGR. We expect a deceleration in this growth rate going forward as emerging markets 13,500 cool, although the upside would increase the population of individuals that can afford to buy a Ferrari. This would drive an increase in wait list backlog and would contribute to an increase in scarcity value as 12,000 production of automobiles remains constant as the population of buyers expands. Margins could also expand as high-net-worth 10,500 individuals will often pay above book value to be shortlisted for the newest automobiles. 9,000 2009 2010 2011 2012 2013 2014

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 8 Recommendation: BUY

Catalysts Continued

Branding

Ferrari is an incredibly strong brand and has consistently ranked as one of the most powerful brands in the world. Management has identified a number of opportunities to generate higher revenue from further commercializing the brand. The firms continues to move towards a more diversified revenue model which includes more branding and licensing of its brand. These opportunities can be extremely profitable for Ferrari as licensing agreements deliver very high margins with minimal capital expenditure requirements. We expect branding to become a larger component of revenues as more companies pay to attach the Ferrari name to their products.

A new theme park called Ferrari Land, which is licensed by Ferrari, will open in Spain in 2017. In addition, Ferrari licenses its brand for the existing Ferrari World in Abu Dhabi. Since these parks are independently owned and operated, Ferrari receives cash ﬂows with minimal capital expenditure through the life of the parks.

Additionally, Ferrari has made a push to enter new luxury spaces by partnering with retailers to create limited edition Ferrari-branded offerings. The revenues from these goods come at minimal cost to Ferrari and enable the ﬁrm to further diversify its product portfolio with minimal downside.

Emerging Markets

Emerging markets provide a vast demand opportunity for Ferrari. Typically, when a ﬁrm enters an emerging market, they are taking on a large amount of risk as most ﬁrms must build stores, stock those stores, and depend on continued resources including advertising and sales. That is not the case with Ferrari.

As Ferrari continues to develop its emerging market presence, it will do so with little downside risk as the only investment required is the building of dealerships to provide pick up and mechanic services. The brand requires no new advertising as over 600 million people around the globe already watch Formula 1 racing. Additional demand through these markets provides an upside to the ﬁrm’s scarcity value and does so with minimal downside risk as any decrease in demand will be accommodated by customers in other regions. Ferrari is unique in this case as it is the only publicly-traded automobile manufacturer that can have emerging market upside with little downside.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 9

Recommendation: BUY

Risks & Mitigants

Brand Dilution

Management may be tempted to boost shipments in light of strong demand in emerging markets. While this would be positive for the company’s growth prospects, such a strategy could hamper the ﬁrm’s scarcity value. In addition, attempting to exceed 10,000 units of production annually comes with a level of execution risk frequently faced by volume manufacturers. Management appears to recognize the dangers of brand dilution, and has committed to a low volume strategy. Ferrari has always depended on its scarcity value to deliver results and management is expected to maintain the status quo of supply scarcity.

Emerging Markets

During the global financial crisis, Ferrari’s shipments fell 4% while revenues fell 7%. Another global systematic shock could introduce volatility to Ferrari’s otherwise stable cash flows. Going forward, we expect Ferrari to fare better than its competitors in a recessionary environment, as it did during the global financial crisis when it fared much better than almost all automakers including supercar manufacturers.

Formula 1

Ferrari has not won a major Formula 1 championship in ten years. Formula 1 is the backbone upon which Ferrari’s reputation is built upon. A decline in sentiment towards Ferrari’s record could result in changing tastes for its customers. Ferrari remains competitive and what we see as important is Ferrari’s historical record which is where the prestige lies. Ferrari holds the most championships in Formula 1 ever and that prestige will remain.

Corporate Governance

Ferrari’s spin-off from Fiat Chrysler Automobiles highlights the difference between American and European firm ownership. Currently, over 30% of ownership lies with two entities; Exor, the holding company of Fiat’s founders, the Agnelli family, and Piero Ferrari, the son of Ferrari’s founder. This structure is expected in a newly-public Italian firm, especially one associated with a family as much as Ferrari. Owners hold a long history of creating shareholder value, demonstrated by Fiat, one of Europe’s largest firms and Ferrari, one of the most prestigious.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 10

Recommendation: BUY

Management Team

Sergio Marchionne — Chairman

Mr. Marchionne has been the Chairman of Ferrari S.p.A. since October 2014. Marchionne also serves as Chief Executive Ofﬁcer of Fiat Chrysler Automobiles, sits on the boards of Phillip Morris International and SGS SA, and is a director of Exor. Previously, he served as Vice Chairman of UBS AG. He holds a Bachelor of Laws from York University, and an MBA from the University of Windsor.

Amedeo Felisa — Chief Executive Ofﬁcer

Mr. Felisa has been Chief Executive Ofﬁcer of Ferrari S.p.A. since 2008. Previously, Felisa served as General Manager, and Gran Turismo General Manager after a successful career at Alfa Romeo where he served as Head of Product Development. He holds a degree in Mechanical Engineering from the University Politecnico of Milan.

Flavio Manzoni — Head of Design

Mr. Manzoni has served as Head of Design since 2010. Previously, Manzoni served as Director of Creative Design at the Volkswagen Group where he was involved in designing most of the recent Skoda, Bentley, and Bugatti vehicles, as well as redeﬁning the aesthetic philosophy of these brands. He holds a degree in architecture from the University of Florence.

Delphine Renault — Director

Ms. Renault has served as a Non-Executive Director since 2016. Previously, Renault served as Director and Executive Vice President of Louis Vuitton and as Deputy Chief of Christian Dior Couture. She is the daughter of Bernard Arnault, the Chairman of LVMH and was brought on to further Ferrari’s push towards becoming a full-ﬂedged luxury brand. She holds degrees from the London School of Economics and EDHEC Business School.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 11

Recommendation: BUY

Valuation

EV/EBITDA Model

We utilized multiple valuation methods to arrive at a target price for 2019. Our ﬁrst model is an EV/EBITDA multiple model. RACE is currently trading at an EV/EBITDA multiple comparable to a high-end luxury brand. Ferrari’s valuation as a luxury stock is complemented by the fact that they cater to a similar demographic of high- end consumers without the typical inventory risk associated with luxury brands. We have the multiple expanding slightly over our investment horizon due to the increase in branding revenues, emerging market growth, and higher overall margins resulting from continued scarcity value associated with the brand. At 12.75 times EBITDA in 2019, Ferrari will have a market cap of roughly €11 billion and an equity value per share of €59.

We conducted a sensitivity analysis on the EV/EBITDA multiple that drives this model to account for both adverse and favorable scenarios that RACE could face through 2019, such as demand ﬂuctuations in its Branding segment. RACE’s EV/ EBITDA multiple has been placed along the luxury market multiple of 13x times. Multiple expansion is likely based on favorable inventory risk and demand concentration .

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 12

Recommendation: BUY

P/E Model

We used multiple valuation methods to arrive at a target price for 2019. Using three different P/E multiple models, we gauged the probable returns for RACE over our four year investment horizon. RACE’s P/E is currently approximately 28x. We expect the multiple to expand slightly as a result of increased high-net-worth individual populations as well as high growth in the Branding segment.

- In a bull case with expectations for a higher multiple, we expect a 2019 price target of $80.

- Assuming a constant multiple and base case earnings growth, we expect a price target of $73.

- RACE offers a favorable risk-reward investment, with a bearish contracting multiple price target of $66.

A sensitivity analysis was conducted on the multiple in order to account for a variety of scenarios the ﬁrm could face through 2019. Our estimates of EPS coupled with multiple expansion provide a comfortable value proposition.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 13

Recommendation: BUY

Free Cash Flow to Equity Model

We used a free cash ﬂow to equity model to value what RACE is worth today, deriving a terminal value of €59.45 from our EV/EBITDA model. The model implies the stock is roughly 33% undervalued in our base case scenario. The model has implied assumptions based on our expectations of the ﬁrm, its competitors, and the industry: - Top line growth will increase as we observe: the global high-net-worth individual population grow, demand growth in emerging markets and the successful implementation of Ferrari’s incredibly strong brand.

- Bottom line growth is driven by margin expansion from premium pricing based on the ﬁrm’s scarcity value.

- Using a study of the luxury industry, we arrived at a beta of 1.10. In the long term, we expect Ferrari’s beta to be around 0.90 as it is shielded from market ﬂuctuations by catering to the 1% and having no inventory risk.

We conducted a scenario analysis on our free cash ﬂow to equity model to account for changes in discount rates and terminal values. Even in our bear case scenario, RACE is 20% undervalued.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 14

Recommendation: BUY

Appendices

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 15

Recommendation: BUY

Appendices Continued

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 16

Recommendation: BUY

Appendices Continued

Revenue From China 40%

30%

20%

10%

0% Luxottica Cucinelli Ferrari Tiffany Montcler Richemont Hermes LVHM Kering Prada Burberry Ferragamo

Average Sale Price $300,000

$225,000

$150,000

$75,000

$0 Ferrari Porsche BMW Toyota Global Avg

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 17 Recommendation: BUY

Analysts

Finance and Economics major Gino Jo studied abroad at the University of Exeter in the United Kingdom in 2014, where he concentrated on economics and participated in the university's Student Managed Equity Fund through its Business & Finance Society. Jo is the ﬁrst person in his family to pursue a college degree, and is the vice president of the Student Finance Association. He is an Investment Analyst at Morgan Stanley and will be a summer analyst with JPMorgan in New York City. He previously interned with Crosstree Capital Partners as a Healthcare M&A Analyst, and with JPMorgan. A native of Peru, Jo is bilingual and during his free time enjoys traveling and digital photography.

Brandon Moore developed his passion for understanding the global economy during the Great Recession. Ethics and asset protection from risk fueled his interest and led him to pursue a career in investment valuation. Currently Moore is an intern with Raymond James Financial's Corporate and Executive Services trading desk. After graduating in 2016 with a degree in ﬁnance and a minor in economics, Moore will take the CFA exam.

A junior majoring in ﬁnance, Heriberto Ramos developed his interest in ﬁnancial markets due to his admiration of his father, who is part of an investment company in Mexico. Born in Torreon, Mexico, Ramos came to the United States in 2010, moving to Jacksonville to prepare himself for an American collegiate experience. At USF, Ramos has been involved in Enactus as project leader for Suit-A-Bull, a suit-lending program for students of all majors. Ramos plans to work in equity research and later on open his own investment company.

Rick Eldee came to USF as a biology major because his family expected him to pursue a career in medicine, much like the rest of his family. Strong willed, Eldee changed his major to ﬁnance two years later and hopes to learn more about portfolio management and career opportunities in the industry. His hobbies include football and ﬁshing.

Equity Research | April 19, 2016 | NYSE: RACE Analysts: Gino Jo, Beto Ramos, Brandon Moore, Rick Eldee 18