UBS: Ferrari is going to be boosted by 'super margin cars'
Shares of supercar manufacturer Ferrari have been racing higher ever since the company's January 2016 IPO. The stock is up 71.4% and one analyst thinks it has more room to run.
In a note circulated to clients on May 2, UBS equity analyst Michael Binet reiterated his "Buy" rating on the stock and raised his price target from $74 to $85.
Binet said that he expects Ferrari to surpass its 2017 earnings guidance of $950 million and raise guidance to $1 billion by mid year. While UBS's estimates are even higher, Binet said that even his own estimates may be conservative, Here's Binet:
Looking past 2017, Binet said that Ferrari will be able to beat this year's impressive sales numbers with the addition of the Ferrari California relaunch and the continued success of higher production volume vehicles like the 488.
Binet also said that future earnings will be boosted with the edition of more special addition supercars, which carry "super margins." Many of Ferrari's special edition vehicles are only slightly different than preexisting vehicles so that means Ferrari can build them on preexisting platforms and sell them for more.
Binet told his clients looking ahead, expect Ferrari to begin rolling out cars with hybrid technology by 2019.
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