Exor: Is the Market Paying 50 Cents on the Euro for a Portfolio of Moats?

The investment case for Exor hinges on a stark valuation gap. At its current share price, the market appears to be assigning a value of roughly 50 cents on the euro of the company's underlying asset base. This is the classic setup for a potential mispricing-a situation where the stock price diverges sharply from the intrinsic worth of the business it owns.

Evidence supports this view. The company trades at a price-to-book ratio of 0.4x, a steep discount to its direct peers and the broader sector. More strikingly, a discounted cash flow model suggests the stock is trading at an 83.7% discount to an estimated fair value of €456.9. For a holding company with a portfolio of listed and private assets, this kind of gap implies the market is applying a heavy penalty not necessarily to the quality of the assets themselves, but to the structure and current financial results of the vehicle holding them.

Exor's stated objective frames this opportunity. The company's long-term goal is to beat the MSCI World Index through the increase in its Net Asset Value per Share. This is a disciplined, value-oriented mandate focused on compounding the per-share value of its portfolio over time. The current price, however, presents a value investor's dilemma. Is the deep discount a temporary overreaction to near-term headwinds, or does it reflect a permanent impairment of the portfolio's intrinsic value? The market's skepticism is clear, but for a patient investor, it may also be the source of a future margin of safety.

The Moat Check: Quality of the Underlying Assets

The market's deep discount on Exor's shares must be weighed against the quality of the assets it owns. For a value investor, the question isn't just about price, but about the durability of the economic moats within the portfolio. The evidence suggests Exor holds some of the most formidable competitive advantages in the world.

The crown jewel is Ferrari. Its brand is described as "nearly bulletproof", with a customer base that is "about as price-insensitive as you'll find". This represents a classic wide economic moat-a business that can command premium pricing and generate exceptional returns on capital regardless of market cycles. The market's skepticism appears to be focused on the holding company structure, not the quality of this flagship asset. In fact, the math is striking: Exor's stake in Ferrari alone is worth more than the entire market value of Exor's equity.

The portfolio's strength extends beyond Ferrari. In the first half of 2025, Exor's net asset value per share outperformed the MSCI World Index by 5 percentage points. This outperformance was driven by disciplined capital allocation, including a €1 billion share buyback executed during the period. More specifically, Lingotto, Exor's public investments vehicle, delivered strong returns of 11% over the same period. These results demonstrate that the company's capital allocation decisions are compounding intrinsic value, even amid headwinds like tariffs and regulatory uncertainty.

The bottom line is that Exor's portfolio is not a collection of average businesses. It is a curated set of high-quality holdings, led by a brand with a near-monopoly on its niche. The market's current valuation appears to be penalizing the vehicle rather than the assets themselves. For a patient investor, this creates a potential opportunity: to acquire a portfolio of moats at a steep discount, with the expectation that management's disciplined approach will continue to unlock value over the long term.

Valuation and the Margin of Safety: Discount vs. Durability

The numbers paint a clear picture of a deep discount. Exor trades at a price-to-book ratio of 0.4x, meaning the market values its entire equity at just 40 cents for every euro of book value. This is a steep penalty compared to its direct peers, who command a 6.4x multiple, and even the broader sector. For a holding company, this ratio is a crucial sanity check on how investors are pricing its underlying asset base. The market is clearly applying a heavy discount, not to the quality of the assets themselves, but to the structure and current financial results of the vehicle holding them.

This skepticism is not baseless. The company's recent performance has been mixed, with a 1-year total shareholder return of 16.3% decline. Management has acknowledged the headwinds, noting that tariffs and regulatory uncertainties had a substantial impact on its portfolio in the first half of 2025. These macroeconomic pressures have weighed on earnings and likely contributed to the market's cautious stance. The stock's current price of €74.3 sits well below the €116.43 average analyst price target, a gap that reflects a consensus view of undervaluation but also highlights the perceived risks.

So, does this discount offer a sufficient margin of safety? The answer hinges on the durability of the assets versus the persistence of the headwinds. On one side, the portfolio's quality is undeniable, with Ferrari's near-monopoly on its niche and a track record of disciplined capital allocation. The company's net asset value per share outperformed the MSCI World Index by 5 percentage points in the first half of 2025, even amid the turmoil. On the other side, the company reported a net loss of €648.0 million last year, a stark reminder of the cyclical pressures it faces.

For a value investor, the margin of safety is not just a percentage discount, but the width of the moat protecting that value. Here, the moat is wide, anchored by Ferrari. The current price suggests the market is pricing in a permanent impairment of that value, which seems unjustified given the asset's resilience. The discount, therefore, may represent a temporary overreaction to near-term financial noise rather than a permanent loss of intrinsic worth. The real test will be whether management can continue to compound net asset value per share through its disciplined approach, as it has done in the past, thereby slowly eroding the market's skepticism.

Catalysts, Risks, and What to Watch

The investment thesis for Exor now hinges on a few key catalysts and risks that will determine whether the market's deep discount is a temporary anomaly or a permanent feature. The most immediate source of stability is the recent renewal of the shareholders' agreement with Piero Ferrari. This move extends coordinated governance and ownership arrangements through at least January 2029, providing a clear runway for the company's flagship asset to be managed within the portfolio without the uncertainty of a potential governance shift.

The primary catalyst for unlocking value, however, is execution on capital allocation. Management has a significant war chest to deploy. By the end of the first half of 2025, Exor had €4.1 billion of inflows from monetisation of assets, including the Ferrari share placement, plus dividend income. The company's disciplined approach is already evident; in the first half of 2025, a €1 billion share buyback helped drive a 5 percentage point outperformance of net asset value per share over the MSCI World Index. The next phase will be watching how this fresh capital is deployed. Success in identifying and funding new opportunities, or returning capital to shareholders, will be critical to demonstrating that the holding company structure can compound value.

Key risks remain tied to the cyclical nature of its portfolio. Holdings like CNH Industrial and Stellantis are sensitive to global economic cycles and industrial demand. Any prolonged downturn in these sectors could pressure the portfolio's net asset value and test the patience of investors. Furthermore, the broader macroeconomic environment continues to pose a threat. As management noted, tariffs and regulatory uncertainties had a substantial impact on its companies in the first half of 2025. Persistent or escalating trade barriers could continue to weigh on earnings and investor sentiment.

The bottom line is that the path forward is clear but not without friction. The extended governance agreement removes a near-term overhang, while the capital deployment plan provides a tangible mechanism for value creation. Yet the performance of cyclical holdings and the resolution of global trade tensions will be the real tests. For a patient investor, the setup offers a chance to own a portfolio of moats at a steep discount, but the payoff will depend entirely on management's ability to navigate these headwinds and put the €4.1 billion to work.