The Zacks Analyst Blog Highlights Ferrari and Stellantis

For Immediate Release

Chicago, IL – August 27, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ferrari RACE and Stellantis STLA.

Here are highlights from Tuesday’s Analyst Blog:

Is Ferrari Stock a Better Investment Than Stellantis Now?

In the auto sector, Ferrari and Stellantis stand out for completely different reasons. Ferrari is known for building rare, high-performance cars that often cost millions, while Stellantis makes everyday brands like Jeep, Dodge and Peugeot that sell in huge volumes worldwide. While one thrives on exclusivity, the other flourishes on mass production.

But today, both face the same challenges: moving toward electric vehicles, managing supply-chain issues, and adapting to changing customer needs. Ferrari uses its strong brand and limited supply to keep prices high, while Stellantis depends on large-scale production to keep costs low. Looking at these two strategies side by side helps show which company might deliver stronger financial results and value for investors in the near future.

The Case for RACE Stock

Ferrari's financial strength comes from its ability to increase profitability per car while maintaining strong demand. The company's unique blend of pricing power and customer loyalty allows management to adjust prices without hurting sales, as evidenced by 81% of new cars being sold to existing customers in 2024.

Furthermore, its successful pivot to hybrids is a key profitability driver. These vehicles command premium pricing, seamlessly blending performance with innovation, which has helped lift EBITDA margins to an impressive 38.3% in the second quarter. This strategic shift, combined with the company's robust cash flow, ensures that it can continue to invest in new models while rewarding shareholders.

Another advantage is Ferrari's focus on new models and advanced technology. Cars like the Ferrari Amalfi are attracting strong customer interest, while hybrid vehicles already make up 58% of shipments as of the second quarter of 2025 — compared to just 43% a year ago. This shift not only meets tougher environmental rules but also boosts profitability since hybrids carry higher price tags. By carefully blending tradition with innovation, Ferrari ensures that it stays ahead of industry trends without losing its luxury appeal.

Ferrari also benefits from its powerful brand, which brings in revenue beyond car sales. About 12% of its income comes from things like sponsorships, licensing, and merchandise, creating a steady stream of earnings that's less tied to car demand. This diversification provides extra protection against downturns in the auto market. Taken together, Ferrari's exclusivity, innovation, and strong brand presence make it stand out as a company with unusually stable and growing profits.

The Case for STLA Stock

Stellantis, on the other hand, is reeling from weakness in its North America and Europe operations that together account for nearly 70% of Stellantis' total sales, but both regions remain under pressure. In the U.S., sales continue to trend lower, undermining the outlook despite upcoming product relaunches. Europe is another weak link: pricing is cutthroat, demand is sluggish, and margins are extremely thin. While smaller regions like South America and the Middle East show growth, they are not large enough to offset declines in the company's two most important markets.

To combat this, Stellantis is leaning on a refreshed product lineup. The company is reviving well-known models like the Jeep Cherokee and introducing new ones, such as the Dodge Charger, hoping to win back buyers in the United States, one of its most important markets. These efforts are expected to help increase sales and improve profit margins in the second half of 2025.

In the first half of 2025, Stellantis generated €74.3 billion in revenues but reported an adjusted operating income margin that collapsed to just 0.7%, down sharply from 10% a year earlier. At the same time, industrial free cash flow came in at a negative €3 billion compared with -€400 million in the prior year. Further, although Stellantis benefits from some U.S. tariff mitigation due to its North American production base, tariffs remain a significant headwind. The company expects a total tariff cost of €1.5 billion in 2025, with €1.2 billion hitting in H2 alone.

Price Performance

In terms of stock price performance, the contrast is stark. Over the past year, RACE is down a modest 2.6%, demonstrating its resilience and investor confidence. In sharp contrast, STLA has seen a significant decline, falling more than 40% over the same period, reflecting the market's concerns about its recent struggles.

Valuation Comparison

The difference in business models is most evident in their valuation. RACE trades at a premium, with a forward price-to-earnings (P/E) ratio of over 41. This valuation reflects the market's recognition of its stable, high-margin business model and brand power. STLA, on the other hand, trades at just 5x forward P/E, which is a significant discount. This low valuation suggests that the market is pricing in the company's current operational headwinds and risks.

EPS Outlook

The Zacks Consensus Estimate for Ferrari's 2025 EPS projects a healthy 14% year-over-year gain, with another 13% increase expected in 2026. This indicates a consistent growth trajectory.

For STLA, the outlook is less optimistic, with analysts forecasting a 54% year-over-year drop in EPS for 2025 and a further 97% decline in 2026, highlighting the severe headwinds it is facing.

Conclusion

Quite clearly, Stellantis faces significant challenges. Its razor-thin margins, negative cash flow, and heavy tariff exposure pose considerable risks. Ferrari, however, operates in a league of its own. Its business model, based on exclusivity, pricing power, and an unassailable brand, provides a high degree of predictability and profitability that few others can match. The company is firing on all cylinders, from new product innovation to a diversified income stream beyond car sales. Consequently, Ferrari, with a Zacks Rank #2 (Buy), is better positioned than Stellantis, which currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Free: Instant Access to Zacks' Market-Crushing Strategies

Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.

Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.

Get all the details here >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]                                      

https://www.zacks.com                                                   

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research