Ferrari Stock Laps Its Rivals As It Races To A New High

Ferrari (RACE) has left its competitors in the dust, not only on the road but in the stock market as well. As proof, Ferrari stock has roared to a new high.

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The luxury sports-car maker holds the top spot out of 35 stocks in the IBD auto manufacturers industry group. Shares are in the 5% buy zone of a flat base with a 329.88 buy point that reaches to 346.37, according to MarketSmith pattern recognition.

RACE stock gapped up 6.1% following the automaker’s third-quarter earnings report on Nov. 2. Shares continued their climb and broke out of the base the following day. Ferrari stock now sits comfortably above its 50-day moving average after the earnings gap-up.

Further, the car stock reached an all-time high on Thursday.

Its relative strength line ticked up with the stock’s recent ascent. The higher trending volume indicates institutional accumulation. This is confirmed by its high IBD Accumulation/Distribution Rating of A and increasing ownership by mutual funds.

Ferrari Stock: Earnings Outpace Estimates

Here’s the earnings breakdown. Ferrari blew past analysts’ third-quarter earnings estimates on Nov. 2. Its earnings growth accelerated to 60% in the third quarter, up from 40% and 23% in the prior two quarters. This came after two declining quarters.

Quarterly sales growth improved to 33%, from 19% and 18% in the same time period. The company raised its full-year 2023 adjusted earnings and net revenue forecasts, and both are now above projections from Ferrari stock analysts. Analysts expect 31% profit growth this year and 15% in 2024, according to MarketSmith data.

“Another record quarter with profit growth driven by an even richer mix and by the continuing appeal of personalizations (are) leading us to increase year-end guidance,” Ferrari Chief Executive Benedetto Vigna said in the company’s earnings release.

On Tuesday, the auto company announced another tranche of its share buyback program valued around $2.14 billion starting Wednesday and available through June 26.

Ferrari stock holds a best-possible 99 IBD Composite Rating and a 95 EPS Rating.

Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.

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