Share price movement
The Italian luxury carmaker Ferrari N.V. (RACE) is set to release it 4Q15 earnings report on February 2, 2016. Ahead of this event, it’s important for investors to be aware of what analysts are estimating for the company. In this series, we’ll talk about these estimates going ahead in 2016 and beyond. First, let’s take a quick look at Ferrari’s recent price movement.
Ferrari got listed on the NYSE (New York Stock Exchange) last year with a much-anticipated IPO (initial public offering) that was oversubscribed. Prior to this, the company was a part of Fiat Chrysler Automobiles (FCAU) that decided to spin it off. Ferrari debuted on the NYSE on October 21, 2015, with a price of $52 per share. If we look at the recent performance of the stock, it lost more than 20% since the IPO.
A part of this weakness, especially in 2016, can be attributed to a broader market sell-off (XLY) that ignited negative price action in all other major automakers like Toyota (TM), Ford Motor Company (F), and General Motors (GM).
According to the Bloomberg consensus, the majority—or 61.5%—of the analysts covering Ferrari see upside potential in the company’s stock and recommend a “buy.” Three analysts out of 13 recommended a “hold” while only two analysts gave a “sell” recommendation. Investors should pay attention to analysts’ recommendations as these might affect the company’s stock price movement. Also, a change in a popular analyst’s view can cause a significant short-term movement in the stock price.
Currently, Ferrari’s consensus 12-month target price is $52.8 with a return potential of 27.4% from the current market price of $41.5. Colin Langan of UBS Financial has given the highest price target of $60 for Ferrari, representing a return of ~71%. Ryan Brinkman of J.P. Morgan maintains a neutral view on the company. Note that the number of analysts tracking Ferrari is gradually increasing as Citigroup included the company in its coverage list earlier in January 2016.
Analysts’ consensus for Ferrari’s peers with their 12-month return potential are as follows:
- General Motors (GM): 57.1% of analysts have given it a “buy” with a 40% upside potential
- Tesla Motors (TSLA): 40.9% of analysts gave it a “buy” with a 45.1% upside potential
- Toyota Motor (TM): 66.7% of analysts gave a “buy” with a 28% upside potential
- Fiat Chrysler Automobiles: 50% of analysts gave it a “buy” with 49.3% upside potential