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.
|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)|