Ferrari’s (NYSE:RACE) Challenges This Current Year

Ferrari’s (NYSE:RACE) Challenges This Current Year

Ferrari’s (NYSE:RACE) Challenges This Current Year


  • Ferrari (NYSE:RACE) has outperformed the S&P 500 since its October 2015 IPO

Wednesday, Evercore ISI analyst George Galliers pointed to 6 challenges for the iconic Italian Supercar company this 2018.

“2018 will be a challenging year for Ferrari, in our view, the most testing since the company’s IPO,” Mr. Galliers said. “We see 6 challenges which the company must overcome. And earnings growth is likely to slow, as the company lays down the foundations for the next 5 years.”

Below is the list of Evercore’s challenges, as follows (my comments in brackets):

  • Challenge 1 – Rising investments [into higher production and higher revenues profits]
  • Challenge 2 – Weaker mix [of what?
  • Challenge 3 – Fx [the US and China are the biggest markets]
  • Challenge 4 – More relevant valuation comp base [Ferrari has the highest per unit profits in the sector]
  • Challenge 5 – Competitor’s products [competitior ?, Ferrari is the world’s #1 automotive brand]
  • Challenge 6 – F1 

His list includes competition like a potential Aston Martin IPO, Lamborghini beating Ferrari to the SUV segment, somewhat comical since no one expects any of those manufactures to garner Ferrari clienti.

Evercore is, however, confident in Ferrari’s ability to ‘persevere’. I do not expect the Maranello outfit not to ‘persevere’.

“Despite the challenges, slower earnings growth and our more conservative estimates, we believe that Ferrari, and its equity price, will prevail.”

Mr. Galliers has a price target of 115 for Ferrari shares, 4% below the stock’s 120 price Wednesday afternoon.

Wall Street analysts polled have a more Bullish consensus target of 131, mine is closer to 200/share


Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 119.62 28 March 2018 -0.08 121.49 121.74 119.36 336,124
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Bearish (-0.33) Bearish (-0.39) Bearish (-0.29) Bearish (-0.32)

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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