Ferrari’s Strategic Share Buybacks: A Path to Enhanced Shareholder Value

Ferrari N.V.’s EUR 2 billion multi-year share buyback program, announced in 2022, has emerged as a cornerstone of its capital deployment strategy, signaling both confidence in its financial resilience and a commitment to optimizing shareholder value. By analyzing recent tranche performance, treasury share ratios, and capital efficiency metrics, this article builds a compelling case for investors to consider Ferrari as a strategic buy-in opportunity.

Capital Efficiency and Strategic Buyback Execution

Ferrari’s buyback program, expected to conclude by 2026, has already demonstrated disciplined execution. As of June 2024, the company held 5.51% of its total issued shares in treasury, with the fourth tranche alone repurchasing 971,899 shares for €349.99 million [1]. By September 2025, this ratio had expanded to 8.16% of shares, reflecting a cumulative outlay of €1.69 billion since the program’s inception in July 2022 [4]. Such aggressive buybacks reduce dilution and signal management’s belief in the stock’s undervaluation, a critical factor in luxury automotive markets where brand equity and investor sentiment are tightly linked.

Capital efficiency metrics further underscore Ferrari’s strategic acumen. The company’s return on equity (ROE) stands at 45%, a testament to its ability to generate robust returns for shareholders [2]. Concurrently, its return on invested capital (ROIC) surged from 14.4% in 2020 to 24.1% in 2023 [3], indicating improved allocation of capital toward high-margin ventures. These figures suggest that Ferrari’s buybacks are not merely a short-term tactic but part of a broader strategy to reallocate capital to its most productive use—its own shares.

EPS Accretion and Share Count Dynamics

Share repurchases directly enhance earnings per share (EPS) by reducing the denominator in the EPS equation. Ferrari’s EPS growth has already outpaced broader industry trends, with a trailing twelve months (TTM) EPS of €8.82 and a five-year compound annual growth rate (CAGR) of 20.9% [2]. Projections indicate this trajectory will continue, with EPS expected to reach €7.93 by 2027, driven by higher average selling prices and margin expansion [3].

The reduction in share count amplifies this effect. Over the past five years, Ferrari has cut its share count by 3.2% [1], a trend accelerated by the buyback program. For instance, the fifth tranche (July 2024–June 2025) alone allocated €250 million to repurchases, including a non-discretionary component on the New York Stock Exchange [1]. By September 2025, the company had repurchased 5,134,771 shares, with the eighth tranche adding further momentum [4]. These actions create a flywheel effect: lower share counts boost EPS, which in turn can justify higher valuation multiples.

Equity Value and Stock Price Performance

Ferrari’s stock price performance from 2023 to 2025 reflects the market’s positive reception of its buyback strategy. In 2023, the stock surged 59.12%, closing at $331.28, while 2024 saw a 26.34% gain, reaching $418.53 [2]. By July 2025, it hit an all-time high of $517.65 before retreating slightly to $471.02 by August 22, 2025 [2]. Despite a 10.81% pre-market dip following Q2 2025 earnings that missed analyst expectations [5], the stock’s trailing P/E ratio of 46.05 and forward P/E of 39.22 [2] remain elevated, reflecting investor confidence in Ferrari’s long-term growth prospects.

The correlation between buybacks and valuation metrics is evident. For every 1% reduction in shares outstanding, Ferrari’s EPS accretion has historically exceeded 1.5%, a premium driven by its high-margin business model [3]. This dynamic is further reinforced by Ferrari’s net profit margin of 22.9% [2], which ensures that buybacks are funded by strong cash flows rather than debt, preserving financial flexibility.

Conclusion: A Strategic Buy-In Opportunity

Ferrari’s buyback program is more than a shareholder-friendly gesture—it is a calculated move to enhance capital efficiency, drive EPS growth, and sustain equity value in a competitive luxury market. With over €310 million remaining in its 2022–2026 program as of September 2025 [4], and a debt-to-equity structure that remains conservative [3], Ferrari is well-positioned to continue rewarding shareholders. For investors seeking exposure to a brand with enduring appeal and disciplined capital allocation, Ferrari presents a compelling case.

**Source:[1] Ferrari N.V.: Completion of the Fourth Tranche and ... [https://www.stocktitan.net/news/RACE/ferrari-n-v-completion-of-the-fourth-tranche-and-announcement-of-the-dfu1hpjefdex.html][2] NYSE:RACE Financials | Ferrari NV [https://www.investing.com/equities/ferrari-nv-financial-summary][3] Return on Invested Capital For Ferrari NV (RACE) [https://finbox.com/NYSE:RACE/explorer/roic/][4] Ferrari N.v.: Periodic Report on the Buyback Program [https://markets.financialcontent.com/wral/article/gnwcq-2025-9-8-ferrari-nv-periodic-report-on-the-buyback-program][5] Ferrari Q2 2025 Earnings Call Transcript [https://www.investing.com/news/transcripts/earnings-call-transcript-ferrari-q2-2025-misses-forecasts-stock-dips-93CH-4163992]