Overview of TIP836: Exor N.V. (EXO) — The Massive Discount Continues To Widen
This episode is a thesis update on Exor N.V., the Italian holding company best known for its large stake in Ferrari. The core idea is that Exor trades at a major discount to net asset value (NAV), so investors can effectively gain indirect Ferrari exposure at a substantial discount while also getting Exor’s other assets for free, or nearly free. The hosts revisit the original investment, assess whether the thesis still holds, and ask whether the widening discount is a temporary market inefficiency or a sign of deeper skepticism about Exor’s capital allocation.
Core Investment Thesis
Why Exor was attractive
- Exor’s market price was far below the value of its underlying holdings.
- At purchase, Exor’s NAV was estimated around $193 per share, while the stock was bought around $86.
- The biggest attraction was Ferrari:
- Exor owns a large stake in Ferrari.
- Ferrari is a high-quality, highly resilient luxury business.
- Buying Exor offered a way to get Ferrari at a much cheaper effective valuation than owning Ferrari directly.
The “two engines” thesis
The upside case depended on:
- Ferrari continuing to compound intrinsic value
- Exor’s discount to NAV narrowing, possibly via:
- share buybacks
- better capital allocation
- improved investor sentiment
- successful performance from other holdings
What Has Happened Since the Original Purchase
Exor’s stock and NAV discount
- Exor was bought at about $86 per share and later traded around $79.
- The discount to NAV has not narrowed; in fact, it has widened.
- The hosts stress that this is frustrating, but not yet thesis-breaking.
Ferrari’s stock performance
- Ferrari’s shares have been volatile and weak over the year.
- The stock was hit by:
- a re-rating lower in its valuation multiple
- concerns over slower growth
- reaction to Ferrari’s EV plans
- Despite this, Ferrari’s business remains fundamentally strong.
Ferrari: Business Update and Thesis Check
What still looks strong
Ferrari continues to show:
- High pricing power
- Strong margins
- Scarcity-driven demand
- An extremely loyal customer base
- roughly 85% repeat customers
- Resilience in downturns
Key operating observations
- Q1 2026 volume annualized to roughly 13,700 units, around historical highs.
- EBITDA margins improved slightly, from about 39% to 40%.
- R&D as a percentage of sales remains around the expected level.
- Ferrari is already close to the hosts’ long-term 30% operating margin target.
Why the market sold off Ferrari
The episode argues the sell-off was driven more by narrative than by fundamentals:
- The introduction of Ferrari’s first EV caused backlash.
- Some investors worry the brand is being diluted.
- Management also lowered its long-term EV mix expectations, signaling a more cautious transition.
- Slower expected growth led the market to compress Ferrari’s valuation multiple.
The EV controversy
- The EV, referred to in the transcript as the “Luce,” was widely criticized as being too practical and not emotionally aligned with Ferrari’s brand.
- The hosts argue the market may be overreacting:
- Ferrari may be using the EV to reach new customer segments
- the core brand still remains exceptionally strong
- The episode cites demand indicators suggesting the EV may be sold out in some markets and that the order book extends well into 2027.
Ferrari valuation takeaway
- Ferrari is still expensive by normal standards, but less expensive than it has been in years.
- The hosts see Ferrari as still a very strong business, even if the stock is no longer at the extreme valuation it once enjoyed.
- Their conclusion: Ferrari’s thesis looks largely intact.
Exor’s Broader Portfolio
Main holdings discussed
Besides Ferrari, Exor also owns stakes in:
- Stellantis
- CNH Industrial
- Philips
- Juventus
- private investments such as The Economist and Christian Louboutin
Recent performance snapshot
- Stellantis had a very weak year, down sharply.
- CNH and Philips were modestly positive.
- These assets are meaningful, but Ferrari remains the crown jewel.
Portfolio simplification and divestitures
- Exor has made some sales and divestitures:
- including Iveco Group and other smaller stakes
- The hosts view this as potentially positive if it means:
- more cash for buybacks
- a more focused portfolio
- better alignment with shareholder value creation
Lingotto: A Potentially Valuable Hidden Asset
What Lingotto is
- Exor’s investment management arm, Lingotto, manages capital from:
- Exor
- outside investors
- It earns fees like a hedge fund or mutual fund manager.
Why it matters
- Lingotto’s assets under management have tripled since launch.
- A lot of that growth appears to have come from investment performance, not just inflows.
- The hosts see Lingotto as a potentially meaningful future earnings stream.
Example holdings cited
- Teva Pharmaceuticals
- Carvana
- Paramount Skydance
- Valaris
- NovaGold
The point is not that Exor should become a hedge fund, but that Lingotto adds another layer of value that the market may underappreciate.
Risks and Concerns
1. The discount may persist
- Holding-company discounts can remain wide for a very long time.
- There is no guarantee the market will ever fully close the gap to NAV.
2. Capital allocation skepticism
- The market may doubt Exor’s ability to reinvest capital well.
- Selling Ferrari shares, even when well-timed, may have been perceived negatively by Ferrari-focused investors.
3. Ferrari growth may be slower than before
- Ferrari is still a great business, but it is more mature now.
- Future growth is likely to be good, not spectacular.
- That means the stock may deserve a lower multiple than in the past.
4. External headwinds
- Luxury demand slowdown in China
- Tariff pressure in certain markets
- Broader narrative risk around EVs and brand perception
Kill Criteria: What Would Break the Thesis?
The hosts say they would become much more cautious if they saw:
- Poor capital allocation from Exor
- especially if management passed on buybacks and overpaid for mediocre acquisitions
- Management instability or control issues
- particularly if the Agnelli family disputes escalated
- evidence that Ferrari is fundamentally impaired rather than just temporarily out of favor
Bottom Line
The hosts’ conclusion is that the thesis is still intact:
- Ferrari remains a high-quality, durable luxury business
- Exor still trades at a very large discount to NAV
- Lingotto and other holdings add optionality
- The main frustration is timing, not a clear breakdown in the investment case
Their view is essentially:
- Ferrari can keep compounding
- Exor’s discount can normalize over time
- even if neither happens dramatically, the current setup still offers an asymmetric return profile
Notable Quote
“I learned not to be desperate in bad times, and I’m learning not to be bullish when times are good.”
— John Elkann, Exor CEO
Key Takeaways
- Exor remains a holding-company discount play with Ferrari as the anchor asset.
- The discount to NAV has widened, but the hosts do not believe the thesis is broken.
- Ferrari’s fundamentals remain stronger than the stock price suggests.
- Exor’s value may also be supported by:
- portfolio simplification
- buybacks
- Lingotto’s growing asset-management business
- The investment case still depends on Ferrari being excellent and Exor eventually closing part of its valuation gap.