Are Third-Quarter Expectations Driving Ferrari Stock Up?


Aug. 18 2020, Updated 10:27 a.m. ET

Ferrari stock

In the week ended September 21, Ferrari (RACE) stock continued to trade on a positive note for the second consecutive week. Last week, RACE rose by 4.0% after gaining 4.2% in the previous week. In August 2018, Ferrari stock continued to trade on a weak note for the second consecutive month. As of September 24, the stock has gone up by 6.0% on a month-to-date basis.

Article continues below advertisement

Technical analysis

On September 24, Ferrari stock settled at $139.00. The stock has been trading on a bullish note since it violated a key trendline resistance near $132 on September 12. The stock has been trading below this descending trendline resistance since June 2018. An immediate resistance in Ferrari stock lies near $143 followed by a key resistance at its all-time high of $149.72.

The stock price has risen well above its 50-day SMA (simple moving average), which was at $130.03, confirming a positive shift in the price trend.

Q3 2018 estimates

In the third quarter, Wall Street analysts expect Ferrari’s adjusted earnings to rise by 7.9% YoY (year-over-year) to $0.80 per share. The company’s adjusted net profit margins are also expected to expand to 17.4% in the third quarter from 16.9% in the third quarter of 2017. These positive estimates could be one of the reasons why its stock is trading on a positive note in September.

Unlike mainstream automakers (XLY) General Motors (GM), Ford (F), and Fiat Chrysler (FCAU), Ferrari confirmed its original 2018 guidance during its earnings event. However, a comment by Ferrari’s new CEO Louis Camilleri during its earnings call hurt investors’ sentiments. On the call, Camilleri mentioned that the targets of former CEO Sergio Marchionne’s 2022 business plan “were aspirational.”

Continue to the next part to learn how Trump’s recent tweet could be hurting Harley-Davidson stock.


More From Market Realist