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Ferrari NV (BIT: RACE) has rallied close to 70% in 2023 but an HSBC analyst is convinced that it’s as far as the stock goes for now.

Ferrari stock receives a downgrade

Michael Tyndall downgraded the luxury automaker this morning to “hold”. His €340 price target is in sync with where the stock is trading at writing.

The HSBC analyst lowered his rating on Ferrari today primarily because its valuation is stretched and potential for earnings surprise is rather limited.

His call on the luxury sports car manufacturer arrives about a month after it reported a strong third quarter and raised its guidance for the full year.  

Still, Tyndall no longer recommends buying Ferrari stock as its order book could shrink over the next twelve months.

HSBC is bullish on Porsche stock

A better buy with more attractive upside is Dr Ing hc F Porsche AG (ETR: P911), as per Michael Tyndall.

The HSBC analyst upgraded the rival luxury automaker to “buy” on Wednesday and said its shares could climb to €100 – up more than 20% from here. His research note reads:

Beyond 2023e, we forecast EBIT margin improvement to 18.6% by 2025e, close to upper end of 17%-19% mid-term target, in line with consensus that suggests limited downside risks to profitability. 

This 2015 Porsche 918 Spyder Weissach with 999 miles on it sold for 1.8 million at the Mecum Auction in Indianapolis Indiana, this was a very cool 918 especially in its Matt finish #Mecum pic.twitter.com/ml24evFHSL

— Ken Lingenfelter (@KenLingenfelter) May 18, 2019

Tyndall is convinced that China-related risks are already priced into the Porsche stock and pricing worries are not data-driven per se. All in all, he’s convinced that the company’s underlying margin potential is better than its German peers. 

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