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Earnings Previews: Ferrari, ON Semiconductor

Paul Ausick

Published: July 29, 2021 12:48 pm

Last Updated: July 29, 2021 12:50 pm

As nearly always during earnings season, Friday afternoon has no notable earnings reports on the calendar. Monday morning also is often light, and next Monday is no different.

After markets close Thursday, Amazon, First Solar and T-Mobile will disclose June-quarter results. On Friday morning, three closely followed companies, including one Dow Jones industrial average component, will report earnings: Caterpillar, Chevron and Exxon Mobil.

Here are two interesting companies reporting before markets open on Monday.

Ferrari

Since coming public in January of 2016, Ferrari N.V. (NYSE: RACE) has traded above its initial public offering price for nearly five years. In the time, the stock has risen by more than 330%. For the past 12 months, Ferrari’s stock has added about 18%, but for 2021 to date, the stock is down about 4.4%. As more high cost-high performance automakers announce electrified cars, Ferrari just unveiled its third plug-in hybrid in June. It will cost $321,000 and have a top speed of 205 mph. The company promises an all-electric car by 2025.

Half of the 10 surveyed analysts covering the stock rate it a Buy or Strong Buy, and two more have given the stock a Hold rating. At a recent price of around $179.40, the stock trades essentially at its median price target of $180. At the high price target of $238, the upside potential on the stock is almost 33%.

For the company’s second quarter, analysts estimate sales of €1.05 billion, up 3.9% sequentially and by 84% year over year. Adjusted earnings per share (EPS) are tabbed at €1.12, up a penny sequentially and 28 times higher than EPS of €0.04 in the same quarter last year. For the full year, revenue is forecast to reach €4.28 billion, up 24% year over year, and EPS are expected to rise by nearly 45% to €4.16.

Ferrari stock trades at 43.1 times expected 2021 EPS, 39.3 times estimated 2022 earnings and 32.7 times estimated 2023 earnings. The stock’s 52-week trading range is $176.03 to $233.66. Ferrari pays an annual dividend of €0.87 (yield of 0.48%).

ON Semiconductor

Chipmaker ON Semiconductor Corp. (NASDAQ: ON) has posted a share price gain of more than 88% over the past 12 months, including a bump of 18% so far in 2021. The company operates in three segments: power solutions including switching and voltage regulation; advanced solutions including analog chips and Wi-Fi; and intelligent sensing, including lidar, radar and other image sensing applications.

Of 26 brokerages covering the company, 19 rate the stock a Buy or Strong Buy and another five give the shares a Hold rating. At a price of around $38.50, the potential upside to a median price target of $45 is nearly 17%. At the high price target of $55, the upside potential rises to almost 43%.

ON Semiconductor is expected to report second-quarter revenue of $1.62 billion, up about 9.5% sequentially and about 26% higher year over year. EPS are forecast to rise to $0.49, an increase of almost 40% sequentially and more than four times year over year. For the full year, current estimates call for EPS of $1.90, up 124% year over year, and revenue of $6.32 billion, up 20% year over year.

ON Semiconductor stock trades at 19.1 times expected 2021 EPS, 15.8 times estimated 2022 earnings and 15.0 times estimated 2023 earnings. The stock’s 52-week range is $19.75 to $44.59. The company does not pay a dividend.

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