Analysts are estimating Ferrari’s 2015 revenues to have grown at a rate of 3.6% to around 2.8 billion euros. That would be close to $3 billion. This rate of growth is considerably lower than in the previous year when Ferrari recorded a revenue growth of 18.3%. This sudden spike in the company’s 2014 revenues could be attributed to the shipments of its limited edition hybrid ‘LaFerrari’. This exclusive car was launched in November 2013 and the company planned a production run of only 499 units.
Note that this is the first Ferrari (RACE) car ever with a price tag exceeding 1 million euros. Now, let’s take a look at analysts’ estimates for Ferrari’s revenues for the coming years.
Revenue growth: 2016 and beyond
For 2016 and 2017, analysts are estimating Ferrari’s global revenues to grow at a rate of 3.6% and 3.1%, respectively. Along with analysts’ recommendations, it’s also important for investors to pay attention to these revenue estimates. They may reflect market expectations from the company. These estimates can also serve as a proxy for what might be priced into the market.
Investors should be aware that Ferrari can be seen as a luxury product manufacturer rather than just an automaker. The company follows a low volume strategy to maintain the exclusivity of its cars. According to the company’s guidance, Ferrari is expected to raise its sales volume to ~9,000 units per year by 2019. This number reflects a sales volume rise of 17% from expected deliveries of 7,700 units in 2016. This gradual rise could be one of the reasons why analysts are expecting Ferrari’s revenues to grow at a steady pace in coming years.
US-based automakers like Ford (F) and General Motors (GM) face the negative impact of a strengthening US dollar. However, Ferrari’s reporting currency is the euro as the company is based out of Italy. The euro has dramatically fallen against all major currencies, including the US dollar, by nearly 11% in 2015. Having a ~30% exposure to the US market among all of its major geographical markets, Ferrari benefited from the weakening European currency.
Let's discuss valuation multiples. Ferrari has a forward EV-to-EBITDA multiple of 9.5x for the next 12 months. That's significantly higher than its peers.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.