What Do Analysts Think About Ferrari N.V.'s (NYSE:RACE) Earnings Trend?




  • In Business
  • 2019-02-11 14:47:23Z
  • By Simply Wall St.
 

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Ferrari N.V.'s (NYSE:RACE) released its most recent earnings update in December 2018, which revealed that the company gained from a strong tailwind, leading to a double-digit earnings growth of 47%. Below, I've presented key growth figures on how market analysts perceive Ferrari's earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

See our latest analysis for Ferrari

Analysts' outlook for this coming year seems pessimistic, with earnings decreasing by a double-digit -13%. Beyond this, earnings will begin to improve, climbing year on year, and reaching €790m by 2022.

Even though it's helpful to be aware of the growth year by year relative to today's figure, it may be more insightful determining the rate at which the earnings are rising or falling every year, on average. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Ferrari's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 2.1%. This means that, we can presume Ferrari will grow its earnings by 2.1% every year for the next couple of years.

Next Steps:

For Ferrari, I've put together three pertinent aspects you should look at:

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

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