By Dhirendra Tripathi
Investing.com – Ferrari (NYSE:) shares were weaker by almost 4% in Monday’s trading in line with a two-notch downgrade for the stock by Goldman Sachs (NYSE:).
In going from buy to sell on the stock, the Wall Street giant cut its target to $207 from $227. The shares are today trading below analyst George Galliers’s estimate.
The analyst does not expect Ferrari to notably benefit from any easing in supplies of semiconductors and improving demand.
Galliers expects Ferrari to hasten its transition to greener technologies and spend more on them. While this will be good for the company in the long-term, the analyst believes it may drive the need for higher capital expenditure.
While a higher capex does not always necessitate a need for more fund-raising, it leaves a that much less money to distribute as dividend or undertake similar investor-friendly measures in the short-term.
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