Italian luxury yachts – two undiscovered growth plays

I just spent six days cruising around the Galapagos Islands on a 141-foot (43-metre) luxury yacht, together with 14 readers of Undervalued-Shares.com.

Thanks to satellite Internet, I effectively ran a virtual office from the boat – all from the middle of the Pacific, and at virtually zero cost.

Using a yacht as floating office is quickly becoming mainstream. According to industry sources, cinema rooms on new yachts are now being replaced by multi-screen, Bloomberg-connected workspaces.

That's just one of the unexpected trends I came across while researching this industry.

Among the findings: two Italian yacht makers that investors should take a closer look at – both with share prices offering 50% upside.

Facts you didn't know about the luxury yacht market

Most luxury yachts are produced by privately held companies – one reason many public market investors remain unfamiliar with the industry.

What caught my eye recently were several industry trends highlighted in a UBS research report: "Buoy oh Buoy! Luxury Yachts in 10 Key Charts".

During my adult lifetime (since 1990), the number of superyachts worldwide has grown six-fold. Back then, only about 1,000 superyachts existed; today, there are over 6,000, with another 700 already under construction.

Source: UBS, 10 October 2025.

Curiously, despite this strong growth in absolute numbers, market penetration among the world's superwealthy has declined. In 2013, 2.2% of them owned a superyacht; today, it's just above 1%.

Source: UBS, 10 October 2025.

Yet those who do own a yacht now spend far more time onboard. Before 2020, the average superyacht owner spent 60 days per year on their vessel. Today, it's 120 days.

The pandemic played a major role, making a mobile lifestyle more common (and more acceptable). Connectivity has also improved drastically. The yacht I charter in the Galapagos Islands for a week with readers once had a slow, unreliable Internet connection. Thanks to innovation and competition among providers, it now has superfast, reliable Internet .

Superyacht buyers have also become younger. Before 2020, the average new owner was 56. Today, they're 49.

Rising wealth levels, as well as the transfer of wealth to younger generations play a role, so does a broader shift toward experiential luxury. Rather than acquiring high-end tangible goods, younger buyers favour immersive experiences – and a luxury yacht (or an expedition yacht for the more adventurous) offers precisely that.

Last but not least, a growing number of destinations are now catering to this clientele. Europeans will know the fast-growing superyacht hub in Montenegro. Other high-profile berth expansions have taken place in Sardinia (Italy), Miami Beach (USA), Singapore, Hainan Island (China), Los Cabos (Mexico), and Yas Marina (Abu Dhabi) – to name just a few. New marina projects coming online soon include the Maldives (spring 2026), Kobe in Japan (spring 2027), Benoa in Indonesia (2026), Colombo City in Sri Lanka (2027), and Lantau, Hong Kong (2028+). Globally, marina capacity is expected to grow by 5.6% p.a. through the decade.

Source: UBS, 10 October 2025.

The rich are indeed growing richer at a faster pace than the rest of the population – a trend documented annually in the UBS Global Wealth Report. No wonder the market for larger yachts is expanding faster than the market for smaller boats.

Historically, the highest growth has been in yachts over 100 feet (30 metres). Between 2021-2024, this segment grew at 23% p.a., versus 11% for smaller boats. While the pandemic distorted demand, and the market is still reeling from an oversupply of second-hand boats, the divergence is expected to persist. Through 2030, yachts over 100 feet are projected to grow at 6.8% p.a., versus 'only' 4.2% p.a. for smaller craft.

Overall, the market for large yachts is set to grow significantly.

Which public companies are positioned to benefit?

Italy rules supreme

60% of all superyachts sailing today were built in Italy. Turkey and the Netherlands each hold another 10% of the global market by units.

Germany often makes headlines thanks to Lürssen's massive vessels commissioned by high-profile clients. However, measured by the number of boats, Germany accounts for just 3% of the market (or 13% by gross tonnage due to the sheer size of its yachts).

Source: UBS, 10 October 2025.

Over 80% of the ≈700 large yachts currently under construction will come from Italy (57%), Turkey (17%), and the Netherlands (10%).

Meanwhile, the number of shipyards capable of producing yachts measuring 30-40 metres has shrunk dramatically, from 110 around 2010 to just 49 today. In this industry, it's 'go big or go home'. Smaller producers struggle with the growing complexity and often sell out to larger producers.

Source: UBS, 10 October 2025.

Industry consolidation has reached the point where just five companies control 50% of the global market for large yachts.

Source: UBS, 10 October 2025.

Three of these five are privately held, but two are listed: Ferretti (ISIN IT0005383291, IT:YACHT) and Sanlorenzo (ISIN IT0003549422, IT:SNL). Both Milan-listed, they have a market cap of around EUR 1bn each.

Are these companies worth a look?

Two Italian small-caps with 50% upside

Ferretti is a special situation, due to its ownership structure and geopolitics. The company is majority-owned by a Chinese state-linked entity (Shandong State-Owned Assets Supervision and Administration Commission). Given Ferretti's strategic importance to several Italian shipyards, the Italian government could potentially force a change in control. Given everything that has happened to Russian assets since February 2022 and the ongoing concerns about China's ambitions, such a scenario is anything but unlikely.

Possibly anticipating this risk, the Chinese owners took Ferretti public in 2022, through a placement in Hong Kong. One year later, the company dual-listed on the Milan stock exchange and placed further shares.

Source: Decode39, 28 June 2023.

Today, the Chinese hold 37%. The second-largest shareholder is Valea Foundation (14.5%), a Liechtenstein-based foundation representing Czech investor Karel Komárek. Piero Ferrari, the son of Enzo Ferrari, owns 4.6%.

Ferretti currently trades at a discount to peers – just 4x 2026E EV/EBITDA. Such a low valuation multiple is more in line with a Chinese small-cap stock than a European luxury goods company – the latter often trading for 12-20x EV/EBITDA. It's cheap in both relative and absolute terms, but involves getting into bed with the Chinese government.

In a 24 October 2025 research note on Ferretti, UBS highlighted three reasons to like the stock:

"1) it offers exposure to the attractive luxury yacht industry, where we see more sustainable trends following the post-COVID boom; 2) it is the market leader in the most profitable segments of the yacht industry which supports both revenue and profit growth; 3) cash generation underpins shareholder returns and potential for M&A."

UBS's price target of EUR 4.35 is about 50% above the current share price.

Ferretti may only thrive once the Chinese leave the stage altogether. In turn, someone could acquire de facto control of a leading European luxury yacht maker. Has anyone alerted LVMH yet? Will the Czech investor strike?

Sanlorenzo, meanwhile, is a more conventional play. It operates across four segments: yachts (24-38m overall length), superyachts (40-73m overall length), Bluegame (13-23m overall length), and Nautor Swan (sailing and motor yachts). The company also offers services such as maintenance, chartering, resale, and custom-design.

These ancillary services matter, as they deepen customer relationships and build recurring revenue. Around 40% of superyacht buyers at companies like Ferretti and Sanlorenzo are repeat customers. Superyachts are typically resold after just 4.5 years, and the typical repeat buyer spends 70% more (!) on their next vessel. By running its own brokerage service, Sanlorenzo captures resale commissions and positions itself for the next (usually substantially larger) new-build order.

Brand building is also becoming more prominent. Sanlorenzo's "Casa Sanlorenzo" creative hub in Venice is a good example, "blending the worlds of yachting, art, research and creativity with a distinctive identity".

During the pandemic-driven yacht boom, Sanlorenzo's share price quadrupled. It has since been pretty lacklustre and is now back to its 2021 level.

Sanlorenzo.

Based on the latest UBS estimates (11 November 2025), the stock trades at 6x EV/EBITDA and 10x earnings. Again, you'd expect a European luxury goods company to trade for at least twice that multiple. UBS's target price is EUR 47, versus the current EUR 31. The company is debt-free and thus in a strong financial position. If (or when) smaller yacht makers come onto the market, Sanlorenzo could buy market share and add more brands.

Source: UBS, 11 November 2025 (click on image to enlarge).

With only a handful of listed yacht and marina-related plays, this truly is a niche sector. Global industry revenue is only about EUR 10bn per year.

Still, as today's Weekly Dispatch shows, a combination of ongoing growth and unique circumstances makes it a compelling space to follow.

This article covered only some of the aspects shaping this industry and its key players. If you are a paying Member of Undervalued-Shares.com and want to dive deeper, do get in touch and I'll share additional research.

Or, like me, you can simply become an occasional yacht user – for example, by joining next year's trip.

My 2026 Galapagos trip

It's become something of a tradition. By popular demand, I continue organising trips to the Galapagos Islands, exploring the archipelago's natural wonders aboard a luxury yacht.

I once lived in the Galapagos Islands for four years, and revisiting friends is one of many reasons I enjoy coming back. After this week's adventures – including swimming with an entire swarm of "Mola Mola" (see video below) – I'll spend more time in the islands' main town.

Even before this trip ended, demand for the next one surged. I've chartered the same boat for 7-14 November 2026, and more than half of the 16 spaces are already taken.

A few spaces remain – double cabins only, meaning you'll need to bring a spouse or friend.

Check out this link for more details or contact me. I can hold a cabin for a few days if you need to check your diary.

And yes, you can even work from the yacht. This article is proof.

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