Ferrari unveiled a car called the Luce. People hated it. The stock dropped. Now the stock is up 17% and two banks think it should go higher. This is the entire story.
The Luce got panned. Not criticized. Not poorly received. Panned. Which means journalists watched a car unveiling and decided the sheet metal looked wrong enough to sell their shares. The technical analysis here is bulletproof: red line went down because car looked bad, red line went up because time passed.
Two banks still see potential. They looked at a luxury car company that sells vehicles for more than most people's houses, watched it recover from a bad PowerPoint presentation, and concluded the stock remains underappreciated. Underappreciated by whom? The market just repriced it 17% higher in the time it takes most people to schedule an oil change.
The thesis seems to be that Ferrari makes expensive cars and rich people keep buying them regardless of whether one model looks like it was designed by a committee that communicated exclusively through fax machine. This is somehow supposed to be a revelation worth upgrading price targets over.
Retail traders saw the Luce unveiling, panic-sold, then watched the stock climb back while they were busy explaining to their spouses why they sold a position in a company that has a twelve-month waiting list for products nobody needs. The banks that see more potential are now selling those same traders the idea that they should buy back in at a higher price.
The car itself is irrelevant. The unveiling is irrelevant. The 17% move is noise wrapped in more noise. But sure, let's pretend the Luce mattered because a line on a chart went down and then went back up. Ferrari will continue selling cars to people who think depreciation is something that happens to other brands, and the stock will do whatever it was going to do anyway, completely unrelated to whether some analyst thinks it's underappreciated after already ripping higher.
The only thing underappreciated here is how fast people forgot why they sold in the first place.
Photo by Brandon Atchison on Unsplash
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