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What's in the Cards for Ferrari (RACE) this Earnings Season?

Ferrari N.V. RACE is set to report first-quarter 2017 results before the market opens on May 4. Last quarter, the company delivered a positive earnings surprise of 39.62%. Moreover, the company delivered positive earnings surprises in each of the trailing four quarters, with an average beat of 34.90%.

Let’s see how things are shaping up for this announcement.

Ferrari N.V. Price and EPS Surprise


Ferrari N.V. Price and EPS Surprise | Ferrari N.V. Quote

Factors Influencing This Quarter

Ferrari, a former subsidiary of Fiat Chrysler Automobiles N.V. FCAU, has diversified revenue sources and generates majority of its revenues from selling luxury cars, engines and Ferrari brand merchandise. Further, the company owns a Formula 1 racing team as well as theme parks.

Moreover, Ferrari is consistently expanding its global presence, which helps boost earnings. The company expects total shipments of around 8,400 units for 2017, higher than 8,014 units recorded in 2016. Improved shipment volumes should boost the company’s revenues and earnings.

However, Ferrari is facing challenges due to recalls related to the Takata airbags. The company has been increasing the recalls and has also raised the expected expenditure regarding the same. In second quarter 2016, the company kept a provision for estimated charges of €10 million which has been raised to €37 million, due to uncertainty in receiving compensation from Takata.

Earnings Whispers

Our proven model does not conclusively show that Ferrari is likely to beat earnings this quarter. This is because a stock needs to have both a positive">Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:

Zacks ESP: The Earnings ESP for Ferrari is +5.66% as the Most Accurate estimate is pegged at 56 cents while the Zacks Consensus Estimate stands at 53 cents. You can uncover the best stocks to buy or sell before they’re reported with our">Earnings ESP Filter.

Zacks Rank: Ferrari carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Price Performance

Ferrari outperformed the Zacks categorized Auto/Truck Original Equipment industry in the last three months. During this period, the company’s share price increased 15.3% while the industry saw a 3.3% increase. The share price rally was driven by consistent revenue growth and an improved guidance for shipment.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Delphi Automotive PLC DLPH has an Earnings ESP of +1.37% and a Zacks Rank #2. The company is slated to report first-quarter 2017 results on May 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ur Energy Inc URG has an Earnings ESP of +100% and a Zacks Rank #3. The company’s first-quarter 2017 financial results are expected to release on May 5.

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Fiat Chrysler Automobiles N.V. (FCAU): Free Stock Analysis Report
Delphi Automotive PLC (DLPH): Free Stock Analysis Report
Ferrari N.V. (RACE): Free Stock Analysis Report
Ur Energy Inc (URG): Free Stock Analysis Report
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