Equity valuation Ferrari NV

Abstract

The presented dissertation has the aim to determine the fair value of the Italian luxury car manufacturer Ferrari NV. In line with this, a target price is developed and finalized in an investment recommendation based on the outcome of this work and the current share price. The state of the art literature of equity valuation and the most suitable valuation approaches for the company are assessed in a first step. Followed by an in-depth analysis of the business and the industry it operates in. Subsequently, the assumptions and the forecasted financials are presented and applied in both, a discounted cash flow and multiples approach. The DCF analysis derives at a share price value of €61.83 compared to the market price of €50.10 as of 16th of November 2016. The multiple valuation arrived at a significantly lower level of €42.62 and did not confirm the results under the fundamental approach. The target price is set to €58.36 and resembles an upside of 15%. A comparison to the valuation of UBS equity research on Ferrari is conducted and critically reviewed to evaluate the differences of both valuations.

Date of Award	21 Feb 2017
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)