Is RACE's Q1 2024 earnings forecast too conservative?

**Ferrari's Q1 2024 earnings forecast does not appear to be overly conservative**. Here's why: 1. **Consensus Rating and Price Target**: The consensus rating for Ferrari (RACE) is "Buy" with an average analyst price target of $460, which is above the current price of $429.71. This suggests that analysts are generally optimistic about the stock's future performance. 2. **Historical Performance and Growth**: Ferrari has a history of strong performance, with earnings per share (EPS) growing by 36% in 2023. The company is projecting earnings to rise further in 2024, with an estimated EPS of $1.89 for Q1 2024. This growth trajectory supports the notion that the current forecast is not overly conservative. 3. **Market Sentiment and Recent Results**: Despite conservative guidance, Ferrari's stock has surged by 12.5% following the announcement of better-than-expected earnings for the fourth quarter. This positive market reaction indicates that investors may not be anticipating the company to issue overly conservative forecasts. 4. **Industry Position and Growth Prospects**: Ferrari's strong brand and luxury market positioning provide a solid foundation for growth. The company's entry into the SUV market and plans to sell fully electric vehicles by 2025 or 2026 add a bit of uncertainty, but they also present opportunities for expansion. These factors suggest that Ferrari is well-positioned for future growth, which could support a more optimistic earnings forecast. 5. **Analyst Forecasts and Comparisons**: Analysts are forecasting earnings per share (EPS) in the range of €7.00-€7.15 for the full year 2024, which would be 8% below consensus. However, this range is still above the €7.49 per share forecast based on operating profit margins similar to the previous year. This indicates that while the forecast may be conservative compared to some metrics, it is not necessarily too conservative when considering other factors. In conclusion, Ferrari's Q1 2024 earnings forecast does not seem to be overly conservative when considering the company's historical performance, market sentiment, industry position, and growth prospects. The consensus among analysts and the company's own projections support this view.