Ferrari (NYSE:RACE) ‘Whisper’ Ahead of Earnings Call

Ferrari (NYSE:RACE) ‘Whisper’ Ahead of Earnings Call


Wall Street expects a Y-Y decline in Ferrari’s earnings on lower revenues when it (NYSE:RACE) reports results for Q-1 Y 2019.

This is the consensus outlook, and it is important in gauging the Maranello Outfit’s earnings picture, that could impact its near-term stock price. The actual results may come in different from some analyst’s estimates.

The stock will likely move further North if the Key numbers Top expectations in the upcoming earnings report, which is expected to be released on 7 May. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management’s discussion of business conditions on the earnings call.

Ferrari the Top performer in the automotive sector is expected to post Quarterly earnings of 0.86/share in its upcoming report, which represents a Y-Y change of -10.4%.

Revenues are expected to be $980.96-M, or – 3.9% from the year-ago frame.

The consensus EPS estimate for the Quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively assessed their estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company’s earnings release offer clues to the business conditions for the period whose results are coming out.

Many of those trying to model Ferrari are very often wrong, in that they still do not understand this Aristocrat.

Zacks especially is in that lot, as its combination modeling makes it difficult to predict what will come from Ferrari.

Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings.

Let’s take a look at the Ferrari Surprise history for gauging its influence on the upcoming number.

For the last reported Quarter, it was expected that Ferrari would post earnings of 0.88/share when it actually produced earnings of 1.14/share, delivering a surprise of +29.55%.

Over the last 4 Quarters, the company has beaten consensus EPS estimates 3X.

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. In Ferrari’s case it has a huge bid under the market and it had a iron clad loyalty agreement with its major shareholders.

Ferrari due to its history, its development of 12 new models, its demand Vs supply equation, its Special Editions and Tailor Maid margins, its world wide dealer network (160 points in 60 countries) requirements is for me a compelling earnings-beat candidate along with its licencing, theme park operations, virtually no advertising expense due to it being the Tier 1 F1 Team and the market fact that the stock is extremely over sold in here setting it up for a huge short squeeze.

My notes: The company’s expectations for Y 2019 are 3% net revenue growth to $3.96-B and 6% adjusted EPS advancement into the $3.96 to $4.18 range

Since its Y 2015 IPO, the company has increased its annual dividend payout every year. For its most recent dividend hike, the company enhanced its annual distribution 45% from $0.803 to the current $1.164.

Over the past 4 years, the company advanced its annual dividend payout amount nearly 125%, which corresponds to an average annual growth rate of 22.3%.

Since its 52 wk low on 24 December 2018, the share price has gained nearly 45%. Furthermore, since the IPO in October 2015, the share price has risen more than 160%.

And Ferrari is the Aristocrat of the automotive sector.

The 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.

HeffX-LTN overall technical outlook for RACE is Neutral to Bullish, there is resistance now at 140.58, then none, as the stock is very oversold, MACD and Stochastics 2 of my 3 of our Key indicators is Very Bullish in here.

Have a terrific weekend.

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