Morgan Stanley Picks Ferrari Over Tesla as its Top Auto Stock

Ferrari is luxury, speed, and prestige. It’s also the latest pick from Morgan Stanley as the top auto stock, surpassing even Tesla.

Despite the hype surrounding Electric vehicles (EVs), Ferrari is not just an EV play. With an unmatched brand, a racing pedigree, and exquisite Italian design and engineering, Ferrari has something that Tesla doesn’t.

That’s why Morgan Stanley analyst Adam Jonas is calling Ferrari the best buy and upgrading the firm’s price target on the Italian brand to $310 from $280.

The luxury automaker has long been a leader in the hybrid market. But in 2021 Ferrari announced plans to launch its first fully-Electric vehicle by 2025 and target 80 percent of all sales to be all-Electric and hybrids by 2030.

Ferrari’s Electric vehicles will benefit from the company’s learnings from hybrids and its racing DNA, which Jonas believes “will be just as high in demand as what investors are used to from [an internal combustion engine].”

That means Ferrari EVs will still offer scarcity, desirability, luxury, and performance—connotations of which come from its Formula 1 racing pedigree—just like their hybrid counterparts.

According to Jonas, Ferrari is “the most recession-proof” Car company, making it an attractive risk/reward. And while Morgan Stanley has a $220 price target on Tesla, the U.S. automaker’s shares are currently trading at about $195.

The luxury auto market is a different beast than the mass market, and the Ferrari brand has not gone unnoticed. By focusing on the total experience, Ferrari is setting itself up to continue outperforming Tesla, regardless of EV hype.

Ferrari’s Electric vehicles will provide a rarefied experience that will be just as desired as its current offerings. With the luxury automaker’s pricing power and brand, Ferrari is the top auto stock according to Morgan Stanley and is an attractive option for investors.

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