Ferrari’s (NYSE:RACE) investigation into the mechanical failure that prevented Pole-sitter Charles Leclerc from starting the Monaco Grand Prix has revealed his accident in qualifying was indeed to blame, saying it caused a crack in a driveshaft hub that ultimately failed on the laps to the grid Sunday.
This was an instance the team have never seen before. When they fired the car up on Sunday morning, the driveshaft was working but when Leclerc headed out on track the hub failed halfway round the lap, which then damaged the driveshaft sufficiently to end his hopes of taking part in the race.
It is believed the gearbox remains cleared to be used again, but given Leclerc did not take part in the race, he will almost certainly take a fresh unit for the next Grand Prix as he can do so without penalty.
Ferrari say they will revise their processes regarding checking components associated with the driveshaft to ensure such issues are able to be detected in the future.
Ferrari is The Aristocrat of the automotive sector.
Our overall technical outlook is still Bullish, a Key indicators are Bullish long-term. Ferrari reported strong earnings for Q-3 on 3 November and did the same for Q-4 and F-Y 2020 as reported on 2 February.
Ferrari Monday finished at 212.22 within its 52 wk range of 127.73 – 233.66 in NY. It’s all time high in NY was marked at 233.66 intraday on 29 December.
Key technical indicators are now Neutral to Bearish. Though the candlestick pattern indicates the confirmation of the break out at 196.01 on 3 November and confirmed.
The Key support is at 208.91 and the Key resistance is at 217/04 at the close Monday in NY. The 10 May DOJI candlestick indicates a move back North and RACE is racing toward 233.66.
Note: At the beginning of Y 2020 I called RACE at 230 by year’s end, the stock was trading at 165.22 on 1 January 2020, on 29 December 2020 it marked 233.66 intraday, its all time high
The Maranello Outfit’s shares were raised to Buy from Hold at HSBC, and Buys at Morgan Stanley and Bank of America.
UBS is now calling the stock at 365. Citi downgraded the stock from Neutral to sell. I have not seen any other Street downgrades.
Ferrari will continue to create value in the long term as it becomes the world’s 1st Super Luxury brand.
Ferrari is a quality 1st long term luxury products investment, BAML raised its call to 270 long term.
I have raised my long term target to 375, a Strong Bull call, the strongest on the Street and am holding the mark during this recent profit taking, and seeing RACE as a buying opportunity.
Ferrari has an average rating of Buy and a consensus target price at 236.92.
The Maranello Outfit’s shares were raised downgraded from Buy to Hold at HSBC.
Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I am calling it 375 long term, the Top on the Street, and adjusting it to 250/share short term.
A number of large investors have recently bought shares of RACE, and there have been very few instances of insider selling over the past yr that we have seen.
The stock is considered defensive in the sector.
Have a healthy day, Keep the Faith!