Ferrari (NYSE:RACE) is a Very Profitable Company

Ferrari (NYSE:RACE) is a Very Profitable Company

Ferrari (NYSE:RACE) is a Very Profitable Company


Last October, Ferrari (NYSE:RACE) was spun off from Fiat-Chryler (NYSE:FCAU), and the company is very profitable.

On 8 July the stock closed at 41.25 and my Key indicators all turn Bullish, and I announced my 2016 Q-4 target at 56/share, Tuesday it hit 54.18 on the way North, expecting consolidations of the recent gains around 50-54 region.

Ferrari has 188.92-M/shares outstanding, the market cap is $10.5-B. The forward dividend is 0.51, and the dividend yield is 0.92%. The diluted earnings per share are 1.91 and the price to earnings ratio is 28.9.

RACE is not not a cheap stock, Ferrari cars are the most expensive in the world.

EBIT margins are 18%.

Very profitable for an auto manufacturer, as there’s a lot of mark-up in high-end Supercars. R&D was 20.5%, not surprised on the cash spent on research, as it takes a lot talent and of money to design and build Supercars.

The US accounts for 35% of sales, China 7%, Europe/Middle East/Africa 43% and Asia/Pacific 15%.

Guidance for Y 2016 is EUR 3-B in revenues and EUR 800-M in EBITDA. For 1-H of Y 2016, revenues were up to EUR1.486-B from EUR 1.387-B in Y 2015. EPS were up to 0.93 Euros from 0.74 Euros.  $1.10 = 1 Euro.

The balance sheet shows EUR585-M in cash, EUR 230-M in receivables and EUR 709-Min receivables from clienti aka customers.

The liability side shows EUR 2.483-B in debt and EUR 274-M in accounts payable. Free cash flow for 1-H of Y 2016 was EUR246.5-M, Strong.

There are only 13 company-operated stores and 25 franchises in the world. The stores are in the cities where you expect to find them. A new store will soon be opening in Las Vegas soon.

Cars and parts account for 75.6% of sales, engines 7.4%, brands and sponsorship 13.4% and other items 3.6%.

The Big Q: How many auto manufacturers have 13.4% of branding account for sales?

The engines division sells to Formula One and Maserati, a luxury unit of Fiat-Chrysler

The free cash flow comes in at about EUR 500-M, divide that by a market cap of EUR 11.55-Band you get a yield of 4.3%. That is Good.


The new LaFerrari Aperata has a top speed of over 120 mph. It is the fastest convertible of all time and sells for $2.2-M.

The Lusso is a new addition and a versatile all a round car, comes with a V-12 or a V-8, seats 4 .

The 488 is a traditional Ferrari and has a V-8 engine.

Puma makes a pair of driving shoes for $125, I received a pair for my 70th BD.

The branded watches range from 100’s to 1,000’s of dollars. Ferrari T-shirts sell for $30 – $85.

Recently, the WS-J published an article on what it takes to buy a Ferrari. You do not just walk into a dealership and get one. For the rarer models, they only sell to favored customers, with restrictions.

Ferrari is part of Exor (OTCMKT:EXOSF) controlled by the Agnelli Family.

Sergio Marchione is Chairman of the Board, he sit on many boards. The corporate HQ in in Holland.

Ferrari is a Tier 1  brand with high profit margins. I have been driving them since 1967.

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 52.51 13 October 2016 -1.00 52.89 53.13 52.39 1,170,000
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Bullish (0.29) Bullish (0.29) Bullish (0.29) Bullish (0.29)

Stay tuned.

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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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