Ferrari's Stock Plunges 4.05% Amid F1 Turmoil and Valuation Concerns

Summary
• Ferrari (RACE) trades at $360.14, down 4.05% from its previous close of $375.35
• Intraday range spans $356.965 (52W low) to $364.16
• Sector leader Tesla (TSLA) rises 0.175% despite Ferrari's selloff
• Analysts debate whether the pullback is a long-term opportunity or overvaluation correction

Ferrari's stock faces a sharp intraday decline amid a confluence of Formula 1 performance struggles, internal team tensions, and valuation pressures. The stock's 4.05% drop to $360.14—a new 52-week low—reflects growing investor skepticism about the luxury automaker's ability to translate its brand strength into sustainable financial performance. With the automotive sector in flux and Ferrari's 36x P/E ratio significantly above industry averages, the market is recalibrating expectations for the Italian icon.

F1 Disappointment and Internal Tensions Drive Ferrari's Sharp Decline
Ferrari's stock collapse coincides with a disastrous 2025 Formula 1 season marked by zero Grand Prix wins and fourth-place finishes in the constructors' standings. Public criticism from drivers Charles Leclerc and Lewis Hamilton—despite team principal Frederic Vasseur's insistence that 'pushing the team' is essential—has amplified investor concerns about brand reputation and operational cohesion. Compounding these issues, Simply Wall St's DCF analysis suggests the stock is overvalued by 264.6%, while a 36x P/E ratio remains double the automotive industry average. The selloff reflects a loss of confidence in Ferrari's ability to balance its racing heritage with financial discipline.

Automotive Sector Volatility as Tesla Holds Steady Amid Ferrari's Slide
While Ferrari's stock tumbles, Tesla (TSLA) trades higher by 0.175%, illustrating divergent investor sentiment within the automotive sector. Tesla's resilience underscores its dominance in EV innovation and production scalability, contrasting with Ferrari's reliance on niche luxury markets and F1 performance. The broader sector remains mixed, with institutional investors recently adjusting positions in Ferrari but maintaining a 'Buy' consensus. However, Ferrari's valuation metrics—particularly its 36x P/E and 33.6x dynamic PE—highlight structural challenges in aligning its premium brand with market realities.

Bearish Technicals and High-Leverage Options for Short-Term Bets
• 200-day MA: $453.56 (far above current price)
• RSI: 34.90 (oversold territory)
• MACD: -7.63 (bearish divergence)
• Bollinger Bands: Price at $360.14, near lower band ($366.53)
• K-line pattern: Short-term bearish trend confirmed

Ferrari's technicals signal a high-probability continuation of the downtrend. Key support levels at $356.965 (52W low) and $340 (critical psychological level) are critical to monitor. The stock's 34.90 RSI suggests oversold conditions, but without a clear catalyst for reversal, the bias remains bearish. Given the lack of leveraged ETFs and the options chain's liquidity, two contracts stand out for short-term positioning:

• RACE20251219P340 (Put Option):
- Strike: $340, Expiry: 2025-12-19
- IV: 35.35% (moderate)
- Delta: -0.15 (low sensitivity)
- Theta: -0.058 (slow decay)
- Gamma: 0.011 (moderate sensitivity)
- Turnover: $5,589 (liquid)
- Leverage: 211.88% (high reward potential)
- Payoff at 5% downside: $20.00 per contract
- This put option offers asymmetric upside if the stock breaks below $340, leveraging high implied volatility and liquidity.

• RACE20260116P350 (Put Option):
- Strike: $350, Expiry: 2026-01-16
- IV: 30.41% (lower)
- Delta: -0.35 (moderate sensitivity)
- Theta: -0.051 (slow decay)
- Gamma: 0.0105 (moderate sensitivity)
- Turnover: $153,079 (highly liquid)
- Leverage: 40.47% (balanced risk/reward)
- Payoff at 5% downside: $10.00 per contract
- This longer-dated put provides downside protection with lower volatility exposure, ideal for a conservative bearish stance.

Aggressive short-sellers should prioritize RACE20251219P340 for its high leverage and liquidity, while cautious investors may use RACE20260116P350 to hedge against further declines. Both contracts benefit from Ferrari's weak technicals and sector-wide valuation pressures.

Backtest Ferrari Stock Performance
The backtest of RACE's performance after an intraday plunge of at least -4% from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 55.90%, the 10-Day win rate is 54.37%, and the 30-Day win rate is 57.42%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest was 4.88% over 30 days, suggesting that while there is volatility, RACE can exhibit strong recovery and growth in the following weeks.

Ferrari at Critical Support: Watch for Breakdown or Rally Catalyst
Ferrari's 4.05% intraday drop to $360.14 has positioned the stock at a pivotal juncture. The 52-week low of $356.965 now acts as a critical support level; a break below this could trigger a retest of the $340 psychological floor. Technically, the stock remains in a long-term bearish trend, with RSI in oversold territory and MACD divergence signaling continued weakness. Investors should monitor the 2026-01-16 options chain for liquidity and directional clues. Meanwhile, sector leader Tesla's 0.175% rise highlights divergent market dynamics. For Ferrari, a catalyst—whether positive F1 performance or valuation correction—will be essential to reverse the downtrend. Aggressive traders should watch for a breakdown below $356.965, while long-term investors may consider the stock as a speculative play if the 36x P/E ratio normalizes to industry averages.