What to Expect from Ferrari Stock after Last Week’s Sell-Off


Dec. 4 2020, Updated 10:53 a.m. ET

Ferrari stock

Last week, which ended on August 3, Ferrari stock (RACE) continued to trade on a negative note for the third consecutive week. On August 3, the stock settled at $124.84, a 5.1% weekly loss. There was a sell-off in the stock after its second-quarter earnings conference call on August 1. The stock plunged 11% during that session.

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Technical outlook

On August 6, Ferrari stock was trading at $123.99. An important horizontal support level for the stock is $118. A breach below that level could attract selling pressure.

That same day, it was trading below its 50-day SMA (simple moving average) of $136.40, suggesting a bearish bias. On the upside, a major horizontal resistance level in the stock is $133. Its 14-day RSI (relative strength index) indicator has recovered from oversold territory to 37.3, still showing an underlying weakness in momentum.

What to expect next

On August 1, Ferrari reported a 16.7% YoY (year-over-year) increase in its adjusted earnings to 0.84 euros (or $0.98) per share for the second quarter. Its global shipments rose 5.6% to 2,463 car units, from 2,332 in the second quarter of 2017. While its revenue fell 1.6% YoY, its EBITDA margin expanded to 31.9% in the second quarter from 29.4% in the second quarter of 2017.

Unlike mainstream automakers (XLY) General Motors (GM), Ford (F), and Fiat Chrysler (FCAU), Ferrari confirmed its original 2018 guidance during its earnings event. But a comment by Ferrari’s new CEO, Louis Camilleri, during the earnings call hurt investor sentiment. To learn more, be sure to read Why Investors Are Worried after Ferrari’s Q2 2018 Earnings Event.

In the next and final part of this series, we’ll see how Harley-Davidson performed in the last few weeks.


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