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Bernstein notes that Ferrari (RACE) can withstand President Trump's upcoming auto tariffs, as the company's wealthy customer base is unlikely to be discouraged by higher prices.
Morning Brief Madison Mills and Brad Smith discuss how certain companies have consumers and pricing power to withstand tariffs.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Bernstein analyst noting Ferrari could withstand the impact of US auto tariffs because its customers won't be deterred by higher prices saying despite being in the crosshairs of President Trump's escalating trade policy. New 25% levies on all auto imports into the US will not undermine the case for Ferrari, which produces all of its cars in Italy. Having said that, you got the stock down a little over 2% here. And and Brad, this is something that we've been talking about, right? Who has the type of consumer and the pricing power to be able to just raise the price of their cars and have a consumer who is completely fine with that, or who is positioned based on where they are producing and and where their supply chains currently lie to not necessarily have a huge impact from tariffs? Those are the two questions, I think, at the moment.
Well, in in luxury vehicle sales too, even as we think about the incentivization. Some of the incentivization is just getting them into the ecosystem so that they know that they can trade in and trade up later on because more often than not it's there's a few different ends of luxury vehicles. There's these super high-end luxury where you are custom ordering a vehicle that's going to get delivered to you. It's going to probably cost hundreds of thousands, maybe millions of dollars and could be a one of one. But then there's the kind of more affordable or approachable luxury and tier where you go up to a dealership and you say, okay, I want that one, but I also want to make sure that if I don't like it in two years, I can trade in and get the newer model as well and get some of what I've already paid kind of applied to that next vehicle as well. So I think that's what we're really thinking about here, how this is going to affect some of the more commonly sold luxury vehicles, whereas afar, afar already like at this juncture, I look, I'm not friends with enough luxury people who are purchasing Ferraris at at this point, so I couldn't tell you what their mindset is. Uh, but I would say that they, if they were planning on purchasing a Ferrari this year, they're probably still going to purchase a Ferrari because they have the money.
Because they have the money. Though I will say the street is mixed and then we'll we'll wrap it up. But we've got about half of the street with a buy, half the street on a hold according to our Yahoo Finance data. So it's interesting to see street still having some questions on the stock.