Ferrari (NYSE:RACE) Sees 2X’ing Earnings by 2022

Ferrari (NYSE:RACE) Sees 2X’ing Earnings by 2022

Ferrari (NYSE:RACE) Sees 2X’ing Earnings by 2022


The iconic Italian Supercar maker Ferrari RACE:RACE) wants to 2X profits to 2-B by Y 2022. The company will focus its production of a hybrid sports car and a FUV to help achieve this goal.

Ferrari reported a profitable Y 2017, with earnings before interest, tax, depreciation and amortization (EBITDA) standing at 1.04-B.

The numbers exceeded most analysts expectations.

Management, predicted it would not crack the 1-B profit margin in at least another 2 years. As is Ferrari’s Aristocrat style, it Beat early.

Ferrari credits the sales boost to its 12-cylinder models such as the GTC4Lusso and 812 Superfast, Ferrari’s fastest car road car to date.

For 2018, Ferrari adjusted its EBITDA prediction to at least 1.1-B and sales of more than 3.4-B. The company also expects to ship over 9,000 vehicles this year, up from 8,398 units in Y 2017.

Ferrari makes very conservative forecasts, so there is scope for the supercar maker to make fitting adjustments as necessary. The company released its mid-term forecast, which suggests an average Y-Y profit growth between 14 to 18%.

This type of earnings growth will not be seen by any other automotive manufacturer over the next 5  years, particularly taking into consideration economic and business cycles, Ferrari’s market transcends the typical automotive sector cycles.

Ferrari’s stock trades as a luxury brand at 37.23X projected forward earnings, it has not and will not compromise its luxury status as the world’s #1 brand in the automotive sector.

Since its October 2015 IPO, the company has posted record earnings, thanks to the strong sales of its V12 and Special Edition models.

I have learned that, according to CEO Sergio Marchionne, that the Maranello Outfit may be approaching the limit of cars it can produce from its current lineup, and will not weaken its exclusive appeal.

Mr. Marchionne believes that the company needs to look beyond Supercars, and that hybrids and FUVs is the answer to broaden its market.

Mr. Marchionne said that investors have nothing to worry about, as the new Ferrari FUV will represent everything that the company stands for, that being beautiful, luxurious fast motorcars.

Mr. Marchionne said the planned Ferrari FUV will be launched by Y 2020.

Friday, Ferrari marked a 52 week and all-time high at 131.20, finishing at 129.67 on the day, and is up after hours at: 130.24 +0.49, or + 0.38%.

My long term target is 200/share.

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 129.67 16 February 2018 0.57 130.32 131.2 129.28 433,653
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Bullish (0.29) Neutral (0.08) Bullish (0.45) Bullish (0.33)

Have a terrific President’s Day weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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