In recent days, Ferrari (RACE) has experienced one of the worst trading sessions since its IPO, sending shockwaves through analysts and investors alike. Let’s look at the facts, the reasons behind the fall, and what might lie ahead for the Prancing Horse.
The facts: how much the stock fell
- On October 9, 2025, Ferrari shares plunged between 13% and 16% on the Milan Stock Exchange — the steepest intraday drop since the company went public in 2016.
- The decline wiped out all the gains accumulated so far in 2025, turning a strong upward trend into a sudden collapse.
- The reaction was also negative across international markets, as global investors responded to the company’s new strategic announcements.
The causes: disappointing guidance and lowered long-term goals
Behind such a steep drop are several decisions and announcements that surprised — and disappointed — the market.
- Overly cautious long-term projections
Ferrari’s new 2030 forecasts came in below analysts’ expectations: projected revenues around €9 billion and an adjusted EBIT of €2.75–2.80 billion — lower than market estimates.
In essence, growth now appears more conservative than in the past, signaling a more cautious expansion strategy. - Reduced targets for electrification
One of the biggest surprises was the downward revision of Ferrari’s fully electric vehicle target: by 2030, only 20% of models will be fully electric, while 40% will be hybrids and 40% will remain combustion engines.
This move caught investors off guard, especially those betting on a bold and rapid EV transition. - High expectations and premium valuation
Before the announcement, expectations were sky-high regarding growth, technology, and profit margins. Ferrari traded at a premium valuation, so any sign of slower growth was magnified.
The forward P/E ratio was already seen as quite elevated compared to the rest of the automotive sector. - Timing and communication during the Capital Markets Day
The drop coincided with the company’s Capital Markets Day, which was expected to be a showcase for new ambitions. Instead, the market interpreted the new goals as a sign of caution rather than strength.
Implications: risks and opportunities for Ferrari
Risks to watch
- Loss of market confidence: such a sharp fall could trigger speculative selling and ongoing pressure on the stock.
- Challenges in the tech transition: a less aggressive EV strategy could leave Ferrari behind competitors who are going all-in on electric.
- Profit margins under scrutiny: investors will closely monitor whether Ferrari can maintain its high margins, especially for customized and premium models.
- Analyst and rating downgrades: potential downward revisions from banks and financial agencies could weigh further on sentiment.
Opportunities for recovery
- Strong brand and protected niche: Ferrari doesn’t compete on volume but on exclusivity — a powerful defensive moat.
- Execution capability: if the company delivers on its updated targets, credibility could quickly return.
- Upcoming catalysts: the launch of the new all-electric “Elettrica” model or future technological updates could help reassure investors.
Conclusion: a plunge into uncertainty or a message of realism?
Ferrari’s stock crash this week is not an isolated event. It reflects the clash between sky-high market expectations and a more cautious corporate outlook. Investors reacted harshly to what they perceived as a warning rather than a prudent recalibration.
While the hit was severe, Ferrari remains a brand built on legacy, exclusivity, and resilience. The coming months will determine whether this was merely a correction — or a turning point that pushes the company to prove its long-term strategy with tangible results.