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Analysts Lower Their Target Price for Ferrari

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Dec. 4 2018, Updated 9:01 a.m. ET

Ferrari stock

Ferrari stock (RACE) has fallen ~7.5% this month after falling 14.5% in October. The fourth-quarter broader market sell-off has affected the Italian luxury carmaker the most among automakers. RACE has outperformed legacy auto companies and the broader market for the last two years. In 2016 and 2017, the stock rose ~21% and 80.3%, respectively, attracting auto investors’ attention. In comparison (XLY), Tesla (TSLA), General Motors (GM), and Ford (F) rose 45.7%, 17.7%, and 3.0%, respectively, in 2017.

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Analysts’ target for Ferrari falls

Of the 11 Reuters-surveyed analysts covering Ferrari, 45% recommend “buy,” and 55% recommend “hold.” About a month ago, 9% of analysts recommended “sell” for RACE. Their 12-month consensus target price for Ferrari stock is $140.03, which is 29.3% higher than its market price of $108.33 and implies potential despite the recent sell-off in Ferrari stock amid market turmoil. However, analysts’ target price has fallen from $145.52 a month ago.

Recent fundamental updates

In the third quarter, RACE’s adjusted earnings rose ~4% YoY (year-over-year), and its revenue rose 0.3% YoY with the help of an 11% YoY jump in its global shipments offset by currency movements. Its adjusted EBITDA margin expanded to 33.2% from 31.8% YoY and 31.9% sequentially. In the next part, we’ll look at analysts’ ratings for Harley-Davidson (HOG) stock this month.

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