There is limited room for Ferrari (NYSE:RACE) to deliver a surprise when it hands down its upcoming second quarter results on Wednesday, August 2 due to rising market expectations, analysts at UBS believe.
“With the shares up 50% year to date (outperforming luxury by 26% and the autos sector by 29%) and 2Q well flagged as being the strongest quarter of the year, we are mindful that investor expectations have risen and a guidance upgrade is already priced in,” the analysts wrote in a note to clients.
The analysts expect the luxury carmaker to post a record quarter, with group sales of €1.493 billion, up from €1.291 billion in the year-ago quarter.
They forecast earnings per share (EPS) of €1.82, an increase from 2Q 2022’s EPS of €1.36.
“Keeping in mind that scarcity is a core value for the company and therefore, given the strong price-mix (UBS estimate of 17% in 2Q), we expect only low-single-digit volume growth,” the analysts wrote.
Additionally, they wrote that they expect Ferrari (NYSE:RACE) to increase its financial year guidance towards about €5.75 billion from €5.7 billion and earnings before interest, taxes, depreciation, and amortization (EBITDA) to a range of €2.18 to €2.22 billion, from a range of €2.13 to €2.18 billion.
“We expect a moderate increase in FY guidance, due to continued record demand on the back of a successful product portfolio and Ferrari (NYSE:RACE)'s well-managed scarcity effect,” they wrote.
“We are positive on Ferrari on a financial year and long-term view but see limited room for surprise at the upcoming results.”
The analysts reiterated their ‘Buy’ rating and US$365 price target for the stock. Ferrari’s US-listed shares traded at US$322.61 on Wednesday afternoon.
They explained that their price target is based on a 12-month forward enterprise value/EBITDA multiple of 23.2 times, a blended average of Hermès and other luxury peers, adjusted for leases, applied to their 2026 financial year EBITDA estimate and discounted back.
“Ferrari remains one of the most defensive companies in the current environment, with exciting growth prospects and three new model launches planned for the remainder of the year, which will continue to drive momentum and earnings visibility,” they wrote.
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