Ferrari’s (NYSE:RACE) Financial Revisions Are Favorable

Ferrari’s (NYSE:RACE) Financial Revisions Are Favorable

Ferrari’s (NYSE:RACE) Financial Revisions Are Favorable


  • Societe Generale up on Ferrari, saying Financial Revisions Are Favorable

Ferrari’s (NYSE: RACE) improved fundamentals, new management and revised financial objectives led Societe Generale to apply higher multiples to its existing forecast for the iconic Italian Supercar manufacturer Wednesday.

Shares of Ferrari fell 9% despite getting favorable comments from stock analysts Wednesday.

Analysts at Societe Generale boosted their price target on the luxury automaker’s stock by 40%, with the rationale that a focus on high-end buyers should warrant a higher valuation for Ferrari.

On an overall bad market day, concerns about the negative wealth effect and the toll it could but likely would not take among the wealthy customers who most often purchase Ferrari Supercars seemed to outweigh any company-specific advantages that Ferrari might have over other luxury-auto specialists.

Societe Generale’s analyst Stephen Reitman upgraded Ferrari from Sell to Hold and increased the price target from 94 to 130.

The upgrade is driven in part by new CEO Louis Camilleri and his concerns surrounding the preliminary reveal of the company’s midterm results, Mr. Reitman said in the upgrade note to clients

The company’s “Icona” strategy establishes a new range of expensive vehicles, he said.

“The entire series of 499 cars, with a price tag in Italy starting at $1.5-M, has already been allocated to Ferrari’s Top clients/collectors.

The significant place holding deposits, interim and final payments for this series will materially drive cash flow and EBITDA without the risk associated with significantly increasing series volumes.”

Ferrari revised its FUV  strategy and plans to launch the Purosangue in Y 2022. This updated plan does not rely on Chinese growth in the sales projections.

“The new CEO and his Team have changed the narrative in a way that we think significantly de-risks the midterm plan.”

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 117.63 10 October 2018 -11.32 123.78 124.81 117.63 1,773,000
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Neutral (-0.11) Bearish (-0.25) Bearish (-0.31) Neutral (0.22)

Stay tuned…

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