|Bid||92.16 x 0|
|Ask||95.00 x 0|
|Day's Range||92.18 - 95.16|
|52 Week Range||83.10 - 129.50|
|Beta (3Y Monthly)||1.45|
|PE Ratio (TTM)||24.02|
|Forward Dividend & Yield||0.71 (0.73%)|
|1y Target Est||N/A|
Luxury carmaker Ferrari fired on all cylinders in Q3 with 5 percent earnings growth driven by strong sales of 8 and 12-cylinder models. As Francis Maguire reports that's good news for new CEO Louis Camilleri who took on the formidable task of replacing the late Sergio Marchionne earlier this year.
We've all heard the doom and gloom surrounding plateauing light-vehicle sales, but these three stocks should thrive long-term anyway -- here's why.
In the previous part of this series, we discussed how Wall Street analysts rate the top two US auto giants—Ford (F) and General Motors (GM). Analysts’ next 12-month consensus target price for Ford reflects a minor upside potential of only 3.7% from its market price.
Ferrari’s shares sagged badly in the months following its 2015 IPO but more than quadrupled in the two years that followed as it delivered consistently good earnings and cash generation. Aston Martin’s stock has dropped 20 percent since its October listing, in line with a selloff in the broader luxury sector. Shareholders will need more proof than Aston Martin provided on Thursday.
Retro sports cars that also look to the future are a hot commodity (see the new/old Ferrari Monza SP1 and SP2), and the Infiniti Prototype 10, first shown at Pebble Beach this year, references both the 1950s and, well, 2030. According to Alfonso Albaisa, senior vice president of global design at Infiniti, the car started with a question, “What if Infiniti had created a race car in the 1940s?” And then, “the sketches were stunning and the idea so compelling that we had to produce a prototype,” he says. The earlier car features a newly designed battery and electric motor from Nissan Motor Corporation's Advanced Powertrain Department, but Infiniti isn’t saying much about the powertrain (if any) in Prototype 10.
The broader market ended last week on a positive note due to the gains that followed the US midterm election results on November 7. Last week, the S&P 500 benchmark (SPY) rose 2.1%. This was the second consecutive week during which US equities continued to rally.
According to the latest consensus data compiled by Reuters, 45% of the 11 analysts covering Ferrari (RACE) gave its stock “buy” recommendations. 55% of analysts recommended a “hold,” while none of the analysts gave it a “sell” rating.
As of November 5, Ferrari’s (RACE) forward EV-to-EBITDA multiple was 16.9x. Ferrari’s EV-to-EBITDA multiple was significantly higher than that of other auto companies (XLY) like General Motors (GM), Ford (F), and Toyota (TM). GM’s, Ford’s, and Toyota’s EV-to-EBITDA multiples were at 8.5x, 13.3x, and 8.9x, respectively.
Being a luxury carmaker, Ferrari strives to attract target consumers with its advanced vehicle design and power. This strategy differentiates Ferrari’s business model from other automakers (FXD) including General Motors (GM), Ford (F), and Fiat Chrysler (FCAU). During its third-quarter earnings event, Ferrari’s management confirmed guidance to ship more than 9,000 car units globally.
In the third quarter, Ferrari (RACE) reported a 5% YoY rise in its adjusted EBITDA to 278 million euros, or about $317 million. Continued positive growth in Ferrari’s shipments and a rise in sponsorship revenues were key factors that acted in favor of RACE’s profit margins in the last quarter. In contrast, currency headwinds were one of the primary factors affecting the company’s profitability in the third quarter.
In the previous part of this series, we looked at Ferrari’s (RACE) higher third-quarter shipments to China, Taiwan, and Hong Kong. On the negative side, the company’s third-quarter YoY shipment growth rate to China, Hong Kong, and Taiwan fell as compared to the first and second quarter of 2018. In 2017, the company’s mainland China shipments rose, while its shipments to Hong Kong and Taiwan remained nearly flat.
In the third quarter, Ferrari (RACE) reported net revenue of 838 million euros, or ~$956 million. During the third quarter, Ferrari’s shipments to all its key markets rose on a YoY basis. In 2017, Ferrari’s revenue went up 10% YoY to 3.41 billion euros, or $4.05 billion.
Italian luxury carmaker Ferrari (RACE) released its third-quarter earnings results on November 5. RACE’s adjusted earnings stood firm at 0.77 euros, or $0.88, per share, in the third quarter, which was about 4% higher than its adjusted EPS of 0.74 euros in the third quarter of 2017. The company missed Wall Street analysts’ estimates of 0.79 euros.
The stock market opened mixed and mostly unchanged early Monday as Wall Street's attention shifted to the midterm elections.
The stock indexes were sharply mixed Monday. Apple stock was down almost 3% after an analyst downgrade.
Tesla (TSLA) stock has remained one of the most volatile auto stocks in the last couple of months. In the fourth quarter, Tesla has risen 30.8% against the S&P 500 Index’s 6.6% fall as of November 2. Mainstream automakers (XLY) General Motors (GM) and Ford Motor Company (F) have risen 7.0% and 1.4% so far in the fourth quarter, respectively.
Ferrari (RACE) delivered earnings and revenue surprises of 2.27% and -2.03%, respectively, for the quarter ended September 2018. Do the numbers hold clues to what lies ahead for the stock?
New Chief Executive Officer Louis Carey Camilleri is pushing for the sale of more limited-edition sportscars that can top 1 million euros to boost profit margins in the next five years.Unfavorable currency movements, mainly from the dollar’s depreciation versus the euro, resulted in a 19 million-euro drag on third-quarter profit. Ferrari sold 34 percent of its cars in the Americas during the period. With the Purosangue SUV due just at the end of the plan in 2022, Ferrari needs lucrative special-edition models to help get there.
When the Italian sports car maker started selling the $2.1 million LaFerrari Aperta convertible in 2016, it helped supercharge revenue and profit growth. Strangely, limited edition models can create a problem for a publicly traded luxury carmaker such as Ferrari. Luckily for investors, Ferrari has a solution: its "Icona" segment will formalize the regular introduction of special edition vehicles.
In the previous part of this series, we saw that Ferrari’s (RACE) valuation multiples were much higher than the multiples reported by mainstream automakers (XLY) General Motors (GM), Ford (F), and Fiat Chrysler (FCAU). Now, let’s look at a few key technical levels in Ferrari stock before its third-quarter earnings event.
Valuation multiples help investors compare companies by indicating whether a stock is overvalued or undervalued. While there are a variety of valuation multiples available, we’ll look at Ferrari’s forward EV-to-EBITDA first. The forward EV-to-EBITDA multiple tells us how a business is valued for each dollar of its estimated EBITDA.
Luxury carmaker Ferrari (RACE) strives to impress its target market with advanced car design and technology. Despite the recent increase in its shipments, the company still preserves exclusivity by producing cars in low volumes. This strategy also helps it maintain high profit margins.