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Thursday, September 23, 2021
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Earnings Preview: Ferrari (NYSE:RACE)

#Ferrari #earnings

$RACE

We have been covering Ferrari (NYSE:RACE) since before its IPO in January 2006, Ferrari has traded above its IPO price for about 5 yrs.

In the frame, the stock has risen by more than 330%. For the past 12 months, Ferrari’s stock has added about 18%, but for Y 2021 to date, the stock is down about 4.4%.

Ferrari unveiled its 3rd plug-in hybrid in June. It will cost $321,000 and have a top speed of 205 mph. The company promises an all-electric car by Y 2025.

60% of the surveyed analysts, Including me, covering the stock rate it a Buy or Strong Buy, and 2 more have given the stock a Hold rating. At a recent price of 216.24 the stock is near its all time high of 233.66/share

For the company’s Q-2, analysts estimate sales of €1.05-B up 3.9% sequentially and by 84% Y-Y. Adjusted EPS are seen at €1.12, up a penny sequentially and 28X higher than EPS of €0.04 in Q-2 last year. For the F-Y revenue is forecast to reach €4.28-B up 24% Y-Y, and EPS are expected to rise by nearly 45% to €4.16.

Ferrari stock trades at 43.1X expected Y 2021 EPS, 39.3X estimated Y 2022 earnings and 32.7X estimated 2023 earnings. The stock’s 52-week trading range is 176.03 to 233.66. Ferrari pays an annual dividend of €0.87, a yield of 0.48%.

Just In: Ferrari today announced that it has completed a private placement to certain US institutional investors of EUR 150-M aggregate principal amount of 0.91% senior notes due Y 2032.

The net proceeds from the offering will be used towards general corporate purposes.

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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

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 closed Wednesday at 212.24 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 Bullish mid to long term. The candlestick pattern indicates the confirmation of the break out at 196.01 on 3 November and confirmed.

The Key support is at 211.25 and the resistance is light through 220.77. The 28 July Bullish Engulfing candlestick is confirming a return to the Very Bullish trend.

All of our Key technical indicators have turned Very Bullish across the board.

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. 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 231.99.

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. And Ferrari continues to buy back its stock in here.

The stock is considered defensive in the sector.

Have prosperous day, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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