Ferrari (NYSE:RACE) Stock Crossed Above Analysts Targets
Shares of Ferrari NV (NYSE:RACE) have crossed above the average analyst 12-month target price of $111.50, finishing Monday, 21 August at 112.85/share marking an all-time high.
When a stock reaches the target an analysts set there are 2 ways to react:
- Downgrade on valuation, or
- Re-adjust their target price to a higher level.
Analyst reaction could also depend on the fundamental business developments that may be responsible for driving the stock price higher, if things are looking up for the company, then it is time for that target price to be raised.
My work shows that it is time to raise the target price of Ferrari shares, near term is at 118/share as there is now strong support at 109.18.
There are 4 different analyst targets contributing to that average for Ferrari NV , but the average is just a mathematical average.
There are analysts with lower targets than the average, including one looking for a price of 96.00, 13pts below the support.
And then on the other side of the coin, 1 analyst has a target at 125.00. The standard deviation is 15.673.
The Key reason to look at the average Ferrari price target is to tap into the wisdom of the market, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just 1 expert believes.
For instance, I see Ferrari as an Aristocrat stock (dividend payer), with my long term target Very Bllish at 200/share, I have not see that number anywhere yet, as I did not see 100 anywhere when I made my call in early January 2017.
Back to the Analysts Average Cross over
So, with Ferrari crossing above that average target price of 111.50/share, investors in Ferrari have been given a good signal to spend more time assessing the company and deciding for themselves.
The Big Q: Is 111.50 a stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
Below is a table showing the current thinking of the Key analysts that cover Ferrari NV :
|Recent RACE Analyst Ratings Breakdown|
|Current||1 Month Ago||2 Month Ago||3 Month Ago|
|Strong buy ratings:||3||3||3||3|
|Strong sell ratings:||0||0||0||0|
The average rating presented in the last row of the above table above is from 1 to 5 where 1 is Strong Buy and 5 is Strong Sell.
The Big A: Again, my work shows that RACE, long term is Very Bullish.
|NYSE:RACE||112.85||21 August 2017||1.32||110.42||112.92||110.37||915,900|
|Bullish (0.47)||Bullish (0.38)||Bullish (0.46)||Very Bullish (0.58)|