Why Exor's shares still look deeply undervalued
As the owner of Ferrari, Exor controls one of the world's highest-quality luxury assets, yet its shares reflect little of that strength. The investment case rests on three components: asset quality, capital allocation, and the discount to net asset value (NAV).
High quality core asset
Ferrari is a high-margin luxury business with gross margins of about 50%. Growth is driven by deliberate supply discipline. Production is constrained to preserve exclusivity, resulting in sustained excess demand and multi-year order backlogs. This underpins both pricing power and earnings visibility.
Proven capital allocation
Returns are driven by changes in underlying asset values, capital allocation decisions, movements in the discount to NAV.
The first two have been delivered historically, although future outcomes remain uncertain.
Discount to NAV
At about 50%, the current discount is wide in both absolute and historical terms. The opportunity lies in mean reversion. A narrowing towards the historical range implies material upside, even without underlying NAV growth.
The investment case does not rely on strong macro conditions. Instead, returns are driven by portfolio execution and the potential for discount normalisation.
On balance, the odds and probabilities favour a narrowing of the discount.
What does Exor do?
Exor's origins trace back to the end of the 19th century, when Giovanni Agnelli founded Fabbrica Italiana Automobili Torino, or FIAT.
Today Exor is a Dutch-listed holding company controlled by the Agnelli family (about 55% economic interest, about 85% voting control). It operates as a permanent capital vehicle, allocating across a concentrated portfolio spanning automotive, luxury, healthcare, and media. Key holdings include companies such as Stellantis, CNH Industrial, Philips and Ferrari.
Strategy and outlook
Management is actively working to reduce the discount and simplify the structure through the following actions:
- about €2 billion of buybacks (completed and ongoing)
- about €3 billion Ferrari sell-down
- about €1.5 billion Iveco monetisation (pending)
- increasing portfolio turnover
Exor maintains a strong balance sheet and operates with limited financial leverage at the holding company level. This provides flexibility to redeploy capital across opportunities.
Returns
Exor has delivered strong long-term returns, with NAV per share compounding at about 18% per annum since 2009. This reflects disciplined capital allocation and a willingness to recycle capital across the portfolio.
While the 2025 results were down on the previous year, the business increased its cash position and reduced debt through disposals, strengthening its balance sheet and executed €1bn of share buybacks at half the underlying value.
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