Ferrari, the iconic luxury sports car manufacturer, has released its medium-term guidance, which fell short of investor expectations. The company’s cautious outlook has led to a sharp decline in shares, but is it an opportunity for value investors to buy in? UBS Research analyst Zuzanna Pusz believes so, citing Ferrari’s commitment to preserving brand scarcity and deliberate avoidance of an overly aggressive price mix strategy.

Ferrari’s guidance was met with surprise from the sell-side and buy-side, who had expected a higher single digit revenue CAGR and EBITDA margin of 41-42%. Instead, the company provided guidance that was well below these expectations, with top line as well as EBITDA margin expectations falling short. This has led to a significant decline in Ferrari’s share price, down 14% today.

However, Zuzanna Pusz believes that this downturn presents a buying opportunity for investors. Ferrari remains committed to its strategy of preserving brand scarcity and avoiding an overly aggressive price mix strategy, which sets it apart from other luxury peers who have made missteps in this regard. This focus on quality and exclusivity is likely to pay off in the long run, according to Pusz.

Ferrari’s cautious guidance can be attributed to several factors, including increased competition in the luxury sports car market, slower-than-expected growth in China, and higher raw material costs. Despite these challenges, Ferrari remains optimistic about its long-term prospects and is committed to delivering sustainable growth and profitability.

Investors who are willing to take a long-term view may find this downturn an attractive buying opportunity. Ferrari’s commitment to preserving brand scarcity and quality, combined with its deliberate avoidance of an overly aggressive price mix strategy, make it an attractive investment for those looking for a luxury sports car manufacturer with a sustainable business model.

While Ferrari’s cautious guidance may have been disappointing to some investors in the short term, it presents a buying opportunity for value investors who are willing to take a long-term view. With its commitment to preserving brand scarcity and quality, Ferrari is well-positioned for sustainable growth and profitability in the years ahead.