Plus: 🧲 A rare earth supplier quietly gains leverage.
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Hey Investor, Welcome to Weekly Picks, where each week our analysts handpick their favorite Narratives. Narratives are a game-changing way for investors to make smarter decisions on their stocks. A narrative always has 3 parts: a story, a forecast and a fair value. You can create one yourself in 3 minutes or you can select one from our thriving community. This week’s picks cover: - 🏎️ Why Ferrari’s unmatched brand power still isn’t enough to justify the stock’s current pricing.
- 🧲 How Neo Performance Materials is positioning itself as a key Western supplier in EV magnets and rare earth processing.
- 🛒 Why Costco remains one of the best retailers in the world, but today’s valuation leaves little margin for disappointment.
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Ferrari's Intrinsic and Historical Valuation |
Ferrari remains one of the most powerful brands in the market, combining exclusivity with industry-leading margins and pricing power. But with growth intentionally capped to protect the brand, the share price appears to assume more upside than the long-term fundamentals are likely to deliver. This leaves little room for disappointment even if the business continues to perform well. |
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32.7% overvalued vs current price |
Based on ~7% p.a. revenue growth for 5 years | | |
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💡 Why we like it: This is a methodical, valuation-first look at an iconic brand, grounded in numbers rather than emotion. It respects Ferrari’s moat while calmly challenging the price investors are being asked to pay today. |
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| Neo Performance Materials |
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Undervalued Key Player in Magnets/Rare Earth |
Neo Performance Materials sits in a critical part of the EV supply chain, supplying high-value magnets and materials rather than digging them out of the ground. If European demand for local, non-Chinese supply keeps building and its new magnet plant ramps as planned, the company could see improved earnings and a valuation that better reflects its role. Much of that upside hinges on smooth execution rather than commodity prices alone. |
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26.1% undervalued vs current price |
Based on 8% p.a. revenue growth for 5 years |
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💡 Why we like it: The narrative cuts through a complex supply chain story and makes it easy to understand why this niche matters. It’s concise, practical, and focused on execution – not hype – making a technical business feel investable. |
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Investment Thesis: Costco Wholesale (COST) |
Costco continues to run one of the strongest retail models in the world, with loyal members, steady growth, and disciplined execution. However, the stock already reflects near-perfect outcomes, meaning future returns depend less on business quality and more on whether expectations can realistically be met. For investors, this makes timing and entry price far more important than usual. |
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29.8% overvalued vs current price |
Based on 7% p.a. revenue growth for 5 years | | |
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💡 Why we like it: This is a disciplined, no-nonsense breakdown of a great business at a tough price. The author is refreshingly honest about valuation risk, clearly separating admiration for the company from realism about future returns. |
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What's next?
1. 🔔 Know when to act: Set the narrative valuations as your own fair value to know when to buy, hold or sell the stock.
2. 🤔 Get answers: Ask the author any questions in the comments section. Feel free to like as well to support their work.
3. ✨ Discover more Narratives: There are hundreds of other insightful stock narratives on our Community page.
4. ✍️ Build an audience: Have your narrative seen by millions of investors, simply meet our Featuring criteria to go into the running! |
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| | This email is from Simply Wall Street Pty Ltd
Level 5, 320 Pitt St Sydney 2000, NSW, Australia. Simply Wall St has no position in the company(s) mentioned. These narratives are general in nature and explore scenarios and estimates created by the authors. These narratives do not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company’s future performance and are exploratory in the ideas they cover. The fair value estimates are for informational purposes only and do not constitute a recommendation to buy or sell any stock. They do not take into account your objectives or financial situation. Note that the author’s analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this email/website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us. Privacy Policy Terms and Conditions
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