Last week, Ferrari stock (RACE) turned negative and ended the week with a ~6.3% loss at $109.36. The company’s stock has risen ~27.1% quarter-to-date and an impressive 88.1% year-to-date. The stock posted an all-time high of $118.10 on September 6.
Continued strength in fundamentals
Ferrari has reported strongly positive EPS (earnings per share) growth in the last eight months. This consistent solid performance could be the primary reason for investors’ positive sentiment.
In 2Q17, Ferrari’s adjusted EPS stood firm at 0.72 euros, or $0.86, about 38.5% higher than its EPS in 2Q16. Ferrari’s revenue rose ~13.5%, with a 5.4% YoY (year-over-year) increase in its global shipments. Similarly, the company’s EBIT (earnings before interest and tax) margin improved to 21.9% in 2Q17 from 19.3% in 2Q16.
Ferrari’s V12 engine car sales rose in 2Q17, which boosted its profitability. In general, Ferrari’s V12 engine profit margins tend to be stronger than its V8 engine margins. Ferrari’s profitability is far better than that of mainstream automakers (XLY) Fiat Chrysler (FCAU), Ford Motor (F), and General Motors (GM).
An immediate support in Ferrari stock lies near $106.70. Only a breach of the all-time high of $118.10 could attract fresh buying in the near term. Continue to the next part to learn how Harley-Davidson stock traded in the first week of September 2017.