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Bear of the Day: Ferrari (RACE)

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With the recent spat of volatility in the market, there have been a lot of stocks under pressure. Overvalued equities have seen their valuations come back to reality in quick order. It’s not the unwinding of the Trump trade or the death of the tech rally. It’s been an across the board selloff, hitting all corners of the market. Today’s Bear of the Day is a stock which was firing on all cylinders last year but is struggling to find enough gas for an encore.

I’m talking about Zacks Rank #5 (Strong Sell) Ferrari (RACE - Free Report) . Ferrari N.V., through with its subsidiaries, designs, engineers, produces, and sells luxury performance sports cars. The company offers seven models, including four sports cars that include 488 GTB, 488 Spider, F12berlinetta, and special series F12tfd; and three GT cars, which comprise Portofino, GTC4Lusso, and GTC4Lusso T. In addition, the company offers non-registered racing cars; and parts, as well as after sales, repair, maintenance, and restoration services for cars. Further, it licenses its Ferrari brand to various producers and retailers of luxury and lifestyle goods; and Ferrari World, a theme park in Abu Dhabi, the United Arab Emirates. Additionally, the company provides direct or indirect finance, and leasing services for the purchase of cars to retail clients and dealers; and manages race tracks.

Ferrari, as a racing legend, is second to none. As a company, they were nearly bought by Ford in the 1960s, under Fiat’s umbrella for years, and recently one of the best performing IPOs in the market. Last year was spectacular as the company set records for earnings and revenues. This year, it looks like it’s going to get a little bit tougher for the prancing horse from Maranello. Analysts have begun to ratchet down their expectations. Two analysts have dropped their earnings estimates for the current year and next year. The bearish behavior has dropped our current year Zacks Consensus Estimate from $3.81 to $.59 while next year’s number has come down from $4.15 to $4.00.

If you’re looking for other foreign automakers to invest in, there are a couple of Zacks Rank #2 (Buy) stocks for you to consider. Daimler (DDAIF - Free Report) and Fiat Chrysler (FCAU - Free Report) are both more favorable options in the eye of the Zacks Rank.

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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

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In-Depth Zacks Research for the Tickers Above


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Ferrari N.V. (RACE) - free report >>

Fiat Chrysler Automobiles N.V. (FCAU) - free report >>

Daimler AG (DDAIF) - free report >>

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