Ferrari (NYSE:RACE) Trading Over $125/share

Ferrari (NYSE:RACE) Trading Over $125/share

Ferrari (NYSE:RACE) Trading Over $125/share


Ferrari (NYSE:RACE) shares have been under some pressure lately after the death of Fiat Chrysler Automobiles (NYSE:FCAU) CEO Sergio Marchionne, who had led Ferrari too.

Ferrari’s new CEO Louis Camilleri, 63 anni, at a recent press conference, had described ambitious $2.3-B EBITDA (earnings before interest, taxation, depreciation and amortization) profit targets for Y 2022 for Ferrari profits as “aspirational”.

The use of that word led some investors to worry that the plan for Ferrari was under pressure, but most analysts do not seem concerned as they see a healthy consolidation in the Bull run up in the iconic Italian Supercar makers shares.

Citi Research is comfortable with the new CEO and has a target share price of $135ish.

Morgan Stanley said it has “great confidence” in the new management, with a share price target of $130ish.

CAR director Professor Ferdinand Dudenhoeffer points out that investors shouldn’t assume a premium name means easy profits.

“Our analysis of the business results of the premium and luxury manufacturers clearly shows that even here money does not grow on trees .

Scale is important, as Porsche and BMW show, and scale is not everything, as Bentley shows.

Ferrari has become the successful model at the high end, as it holds the Top position in the world’s automotive sector even though it is a boutique maker of exclusive, luxury Supercars and HyperSuper cars.

As such the Maranello Outfit leads the industry in a Key financial metric, that is operating profit per unit sold.

According to a German study translated and reported Wednesday, the iconic Italian luxury specialty automaker marks at least $80,000 for every vehicle it sells, by far the highest in the automotive industry.

By contrast the report declares, Jaguar Land Rover makes just $927 per car sold.

For more perspective

The German study goes on to reveal that every Porsche sold brings in at least $19,715 for the company, that is almost 2X the margin of Mercedes-Benz, Audi, and BMW which all boast around $10,500 of profit per vehicle.

Maserati, the luxury unit of Fiat-Chrysler marks with a tidy $5,800 for every car sold.

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 125.07 22 August 2018 -1.26 126.96 127.23 124.74 522,338
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Bearish (-0.33) Bearish (-0.29) Bearish (-0.31) Bearish (-0.39)

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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