Why Ferrari’s Stock Price Has Doubled in the Last 8 Months


Sep. 6 2017, Updated 9:37 a.m. ET

Ferrari stock

Last week (ended September 1), Ferrari stock (RACE) continued to trade on a positive note, and ended the week with a ~2.4% gain, at $116.76. The company’s stock has risen ~35.7% quarter-to-date and an impressive 100.8% year-to-date. The stock posted an all-time high of $117.66 on September 1. Let’s take a look what could be driving this optimism towards Ferrari stock.

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Solid fundamentals

In 2Q17, Ferrari’s adjusted EPS (earnings per share) stood firm at 0.72 euros, or $0.86—about 38.5% higher than its 2Q16 EPS. Ferrari’s second-quarter revenue rose ~13.5%, with a 5.4% YoY (year-over-year) increase in its global shipments. Similarly, its EBIT (earnings before interest and tax) margin improved to 21.9%, compared with 19.3% in 2Q16.

Moreover, Ferrari’s V12 engine car sales rose in 2Q17, which boosted its profitability. In general, Ferrari’s V12 engine profit margins are wider than its V8 engine margins. Ferrari has reported strong EPS growth in the last eight months, which could be the reason for investors’ positive sentiment.

Ferrari’s profit margins tend to be much wider than those of mainstream automakers (XLY) Ford Motor (F), Fiat Chrysler (FCAU), and General Motors (GM).

An immediate support for Ferrari stock lies near $111. On the upside, a breach of the all-time high of $117.66 could attract renewed buying. Continue to the next part to learn how Harley-Davidson stock traded in August 2017.


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