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Ferrari (RACE): Can It Spring a Surprise in Q4 Earnings?

Ferrari N.V.RACE is set to report fourth-quarter 2016 results before the market opens on Feb 2. Last quarter, the company delivered a positive earnings surprise of 22.22%. Let's see how things are shaping up for this announcement.

Factors Influencing This Quarter

Ferrari, a former subsidiary of Fiat Chrysler Automobiles N.V. FCAU , witnessed consistent revenue growth over the last 10 years. The company, which has diversified revenue sources, generates majority of its revenues from the sale of 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 8,000 units for 2016, higher than 7,664 units recorded in 2015. Improved shipment volumes should boost the company's revenues and earnings.

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 0.00% because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 53 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Ferrari N.V. Price and EPS Surprise

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

Zacks Rank: Ferrari carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

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

Price Performance

Johnson Controls outperformed the Zacks categorized Auto/Truck Original Equipment industry in the last three months. During this period, the company's share price increased 17.5% while the industry saw a 9% 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:

Wabash National Corp. WNC has an Earnings ESP of +5.13% and a Zacks Rank #1. The company is slated to report fourth-quarter and full-year 2016 results on Jan 31. You can see the complete list of today's Zacks #1 Rank stocks here.

Autoliv Inc. ALV has an Earnings ESP of +1.63% and a Zacks Rank #3. The company's fourth-quarter and full-year 2016 financial results are scheduled for release on Feb 2.

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Fiat Chrysler Automobiles N.V. (FCAU): Free Stock Analysis Report

Autoliv, Inc. (ALV): Free Stock Analysis Report

Wabash National Corporation (WNC): Free Stock Analysis Report

Ferrari N.V. (RACE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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