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Why Is Ferrari Stock Falling before Its Q3 2018 Earnings Event?

Jitendra Parashar - Author

Nov. 20 2020, Updated 4:26 p.m. ET

Ferrari’s Q3 2018 earnings

Italian luxury supercar maker Ferrari (RACE) plans to release its third-quarter earnings on November 5. On July 21, Louis C. Camilleri was named the company’s CEO after Sergio Marchionne, its former CEO, exited due to his worsening health. Marchionne passed away on July 25, which was the day that Fiat Chrysler (FCAU)—Ferrari’s former parent company—released its second-quarter earnings. 

Until July 21, the 66-year-old Marchionne also served as Fiat Chrysler’s CEO. Before we look at analysts’ estimates for Ferrari’s third quarter, let’s find out why its stock has fallen in October.

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Ferrari stock: Q3 2018 movement

In the third quarter, Ferrari (RACE) stock traded on a slightly positive note and ended the quarter with 1.4% positive returns after rising 12.0% in the second quarter. In contrast, the S&P 500 Index rose 7.2% in the third quarter.

The fourth quarter began on a bearish note for the broader market, and a fear of a continued equities market sell-off also subdued Ferrari investors’ sentiments. As of October 29, Ferrari has lost 16.0% in the fourth quarter. This recent weakness in Ferrari stock could have resulted from profit-taking, as investors were concerned about the turmoil in the broader market and its negative impact on auto stocks in October.

Automakers (XLY) General Motors (GM) and Fiat Chrysler have fallen 1.6% and 8.6%, respectively, in the fourth quarter so far. In contrast, Ford (F) and Tesla (TSLA) have recorded gains of 0.3% and 26.5%, respectively, so far in the fourth quarter.

Ford (F) stock has generally traded on a positive note after it reported its third-quarter results on October 24. Please read Why Ford’s Q3 2018 Earnings Report Pleased Investors to learn more.

Series overview

In this series, we’ll take a look at analysts’ consensus estimates for Ferrari’s (RACE) third-quarter earnings, revenues, and profit margin. We’ll also see how the company’s valuation multiples are trending ahead of its third-quarter earnings event. 

In the next part, we’ll do a quick recap of Ferrari’s second-quarter earnings. We’ll also look at the company’s third-quarter earnings estimates.


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