Top 5 Wall Street Picks in Autos: Ferrari Is in 3rd Position
In 2016, Ferrari (RACE) outperformed legacy automakers and the broader market (SPY) on Wall Street with 21.1% positive returns. So far, 2017 has also been phenomenal for the Italian luxury carmaker. As of September 25, 2017, Ferrari stock has risen 89.4% YTD (year-to-date), which is much higher than other auto companies (XLY), including Tesla (TSLA), General Motors (GM), and Ford (F).
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Third position in top 5 auto stocks
According to the latest data compiled by Reuters on September 25, 2017, 40.0% of analysts covering Ferrari have given it a “buy” recommendation. Another 30.0% have recommended a “hold,” and the remaining 30.0% expect Ferrari stock to fall and have given it a “sell” recommendation.
These analysts’ views are based on the consensus of the ten analysts covering Ferrari stock. Based on analysts’ “buy” ratings, Ferrari stock is in third position on our top five auto stocks list.
Price targets raised again
As of September 25, 2017, Ferrari’s consensus 12-month target price is $110.57, which is 0.40% higher than its market price of $110.14.
In the last couple of months, analysts’ target price for RACE stock has risen significantly. About two months ago, analysts’ consensus target price was $79.30. They raised it to $93.65 a month ago. However, Ferrari stock seems to be racing ahead of analysts’ expectations.
Sales of Ferrari’s V12 engine cars in 2016 fell on a YoY (year-over-year) basis. That concerned investors because cars with V12 engines generate higher profits for Ferrari compared to its V8 engine vehicles.
In the first half of 2017, Ferrari showcased its ability to revive its V12 car sales as the company reported an improvement in those sales. Ferrari also reported 6.4% and 5.3% YoY increases in its global shipments in 1Q17 and 2Q17, respectively. A continuation of this positive trend in the company’s shipments could keep investor optimism alive going forward.
In the next part, we’ll see which auto stock is in fourth place among our top five auto picks.