Analysts’ Recommend ‘Buy’ Ferrari (NYSE:RACE) Stock in October

Analysts’ Recommend ‘Buy’ Ferrari (NYSE:RACE) Stock in October

Analysts’ Recommend ‘Buy’ Ferrari (NYSE:RACE) Stock in October

$RACE, $FCAU, $F, $GM

  • Ferrari, N.V. is moving beyond most analysts’s targets in Y 2017.

In Y 2016, Ferrari (NYSE:RACE)) outperformed legacy automakers and the broader market (NYSEArca:SPY)) on Wall Street with 21.1% returns.

YTD 2017 has also been a strong year for the iconic Italian Supercarmaker. As of 11 October, Ferrari stock has 2X’d with about 100.4% returns YTD.

In comparison, Ford (NYSE:F) has risen about 2.1%, General Motors (NYSE:GM) and Fiat Chrysler (NYSE:FCAU) have 30.5% and 97.7% YTD gains, respectively.

Why Most Analysts Recommend a ‘Buy’ on Ferrari Stock in October

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 According to the recent data from Reuters on 11 October, about 40% of analysts covering Ferrari gave it a “buy” recommendation. Another 30% recommended a “hold,” the remaining 30% expect Ferrari to drop and gave “sell” recommendations.

These percentages are based on the consensus of 10 total analysts covering Ferrari stock.

Ferrari’s consensus 12-month target price was 110.57, which was already about 5% lower than its market price a 115.82 at the close in NY last Friday.

In the last 2 months, analysts’ target price for the company’s stock has risen significantly from 93.65 to $110.57.

But, Ferrari stock is racing far ahead of analysts’ expectations.

While a Ferrari FUV (Ferrari utility vehicle) sounds nontraditional it will likely help the company expand its customer base in its major markets, the US and China.

Earlier during Ferrari’s Q-2 Y 2017 earnings event, Mr. Marchionne hinted at the possibility that Ferrari could build a utility vehicle. Investors’ high expectations from the company’s expansion plan in the utility vehicle segment could be one of the reasons for its recent Wall Street rally.

Also, the sales of Ferrari’s V12 engine cars have recovered in Y 2017 so far after falling in Y 2016. Notably, the V12 engines generate higher profits for the company as compared to its V8 engine cars.

Further, Ferrari reported 6.4% and 5.3% Y-Y increases in its global shipments in both Q-1 and Q-2 of Y 2017 respectively. A continuation of this positive shipment growth trend in Q-3 of Y 2017 is keeping investors’ optimism alive in the long term.

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 115.82 13 October 2017 -0.27 115.81 116.42 115.33 137,107
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Neutral (0.22) Neutral (0.21) Neutral (0.21) Bullish (0.25)

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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