Ferrari (NYSE:RACE) Stock Falls on New CEO’s ‘Aspirational’ Statement

Ferrari (NYSE:RACE) Stock Falls on New CEO’s ‘Aspirational’ Statement

Ferrari (NYSE:RACE) Stock Falls on New CEO’s ‘Aspirational’ Statement


  • Ferrari posted strong earnings for Q-2 and confirmed its revenue estimates for Y 2018

Ferrari’s (NYSE:RACE) shares fell Wednesday after the new CEO told analysts that an annual revenue target set by the late former CEO, Sergio Marchionne, was “aspirational.”

CEO Louis Camilleri, 63 anni, had a difficult inaugural analyst call.

Shares dropped 8% on his comments in the last 20 mins of Milan trading despite strong Quarterly results.

Asked about Mr. Marchionne’s target to reach $2.5-B in revenue by Y 2022, which will be filled out in detail in a business plan presentation next month, Mr. Camilleri said the goals had been reviewed by the board and “were aspirational.”

You should know that Mr. Camilleri worked very closely with Mr. Marchionne on the strategic plan, and that is a Key reason he is the new CEO of the Maranello Outfit.

“Clearly, there were plans behind them. In the capital markets day we will cross the T’s and dot the I’s, and tell you how we think we will get there. But we will have to disclose potential risk to that and also significant opportunities that we see going forward,” said Camilleri.

Later Mr. Camilleri later sought to walk back and clarify his comments, saying he did not mean that the targets were too ambitious, adding that the plans will be outlined in greater detail at the investor day in September.

The new strategic  plan will outline Ferrari’s decision to start making a FUV (SUV), and a hybrid, expanding the market, and re-positioning the brand as a luxury goods company beyond cars.

Early Wednesday, Ferrari confirmed its Y 2018 earnings after posting an 18% rise in net income for the 3 months through June to $187-M.

Sales of 12-cylinder models boosted volumes by 5% to 2,436 vehicles.

Europe and North America led with 7% increases, while sales growth in greater China more than offset a decrease in the rest of Asia.

Ferrari confirmed its Y 2018 outlook for shipments of more than 9,000 units with operating profit above EUR 1.1-B on more than EUR 3.4 in revenues, and that it had retired all of its commercial debt.

Mr. Camilleri told analysts that he and Mr. Marchionne “shared ambitions for the company,” but that the 2 had different management styles and that he would be focused entirely on Ferrari, while Marchionne was deeply engaged in 2 other companies.

He said one of his Key tasks is be to protect Ferrari’s huge brand equity.

“I think my record as CEO speaks for itself in terms of my ability to manage complex and highly regulated industries,” Mr. Camilleri said. “I think I am a team builder. And Sergio had a lot of other things on his plate. I have a singular focus on Ferrari and will be her permanently. I think that will make a difference.”

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 118 1 August 2018 -14.62 134.77 135.4 116.54 6,428,500
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Bearish (-0.36) Bearish (-0.33) Neutral (-0.19) Very Bearish (-0.56)

Stay tuned…

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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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