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Hawk’s Nest

Large Call Buyer Positions in Ferrari (RACE) Ahead of Earnings

by | Jan 31, 2022

Ferrari NV (RACE) reporting earnings on Wednesday before the open with the Street looking for $1.03 on $1.18B in sales. The FY is guided to $4.32/$4.28B. RACE shares have closed higher in four of the last seven with an average closing move of 4% and a max move of 7%. The current implied move is 4.1%. The $42.45B company trades 48.5X earnings and 10X sales with a small yield. RACE appointed a new CEO in mid-2021, Benedetto Vigna, who is challenged with the task of guiding the company into the new EV landscape. The company will host an investor day in June where they’ll unveil the full plan for its EV strategy. RACE is coming off a strong quarter with double-digit growth, up 19%, and raising guidance as they saw record order intake supported by demand from mainland China and the US. Analysts have an average target for shares of $255. RACE was elevated to a Top Pick at MSCO on 1/4 with a Street High $350 PT as they think they can justify 100% of the company’s market cap with the internal combustion engine business, leaving the EV business for free, which makes it the firm’s favorite EV stock for 2022 as well. SocGen upgrading to Buy in November as they continue to sidestep the chronic semiconductor shortages that have forced other automakers to cut output. On the chart, shares have pulled back to the 200-MA and big volume node that started in January 2021 and run until October. A turn higher has room to $247 in the near-term and the balance breakout zone from mid-January. On 1/31, a large trade bought 2,000 February $230 calls for $1.55M. RACE has no other notable open interest. Short interest is 1%. Hedge fund ownership rose 18.5% last quarter. Palestra Capital a buyer of 855K shares. Melvin Capital bought another 300K shares and now holder $1.45M.