Ferrari (NYSE:RACE) Posts Record Supercar Sales and Boosts 2020 Profit Estimate


Ferrari (NYSE:RACE) boosted its Y 2020 forecasts for sales and earnings after the Supercar maker posted record deliveries, a sign that CEO Louis Camilleri’s model-range renewal is working and gathering momentum.

The Maranello Outfit launched a record 5 new models in Y 2019, including the Roma Coupe with a front-mounted 620-horsepower engine, which helped the iconic Italian manufacturer boost sales over 10,000 units a year for the 1st time.

CEO Camilleri, a former Philip Morris International Inc. executive, is revamping Ferrari models so the company can boost average prices of vehicles. At the same time, he working on the long-held goal he devised with former Chairman Sergio Marchionne, who died in Y 2018 to transform Ferrari into a full luxury brand.

Investors like CEO Camiller’s strategy, as Ferrari’s stock has risen more than 40% since he became CEO, though analysts say he has adopted a conservative approach on earnings outlooks for 1 of the world’s most iconic brands.

It’s useful to remind people how conservative Ferrari is in guiding, above all at the beginning of the year and specifically in view of this year’s geopolitical risks such as Coronavirus and BREXIT,” Massimo Vecchio, an analyst for UBI Banca, said in a note to us Tuesday.

Sales in mainland China, Hong Kong and Taiwan jumped 20% in Y 2019. Matching that growth this year could be difficult because of the economic impact of the coronavirus, if there is an economic impact.

Ferrari is controlled by the Agnelli family’s investment company Exor NV, boosted its forecast for Y 2020 net revenue to EUR 4.1-B from EUR 3.8-B prior.

Ferrari reported Q-4 adjusted earnings before interest, taxes, depreciation and amortization of EUR 333-M, in line with analyst estimates of EUR 3.31-M.

The shares were down 1.7% at 4:28p in Milan Wednesday on profit taking after rising as much as 1.9% earlier.

“We expect the shares may face some near-term pressure from the cautious 2020 guidance,” Citigroup Inc.’s automotive analyst said in a note after the earnings report.

Ferrari unveiled its 1st production-volume hybrid model last year, signaling the company’s commitment to reducing its carbon footprint.

We’re very focused on reaching carbon neutrality, we are looking at alternative technologies, fuels, investing a significant amount of resources on this,” CEO Camilleri said on a conference call with analysts.

Ferrari is the Aristocrat of the automotive sector.

Enzo Ferrari’s iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos.

HeffX-LTN overall technical outlook for RACE is Neutral to Bullish, there is resistance at 169.15, and Key support is solid at 164.19, the stock has established strong long term support. The MACD is Very Bullish in here

Ferrari finished at 167.88, -0.65 Wednesday in NY.

Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I have called it at it at 200+/share long term, adjusting it to 200/share short term and siding with BAML to 230 long term for now.

Stay tuned…