Should you buy Ferrari stock on raised full-year outlook?

Ferrari NV (NYSE: RACE) says demand for its luxury-sports vehicles remained strong in recent months and helped drive a beat on earnings in its second quarter.

Notable figures in Ferrari Q2 financial update

• Earned €334 million ($365 million) versus the year-ago €251 million
• Per-share earnings also increased significantly from €1.36 to €1.83
• Revenue climbed 14% on a year-over-year basis to €1.47 billion
• FactSet consensus was €1.73 a share on €1.48 billion in revenue
• EBIT margin improved 470 basis points to 29.7% in the second quarter

The automotive stock is roughly flat today – an opportunity to buy, as per Adam Jonas – a Morgan Stanley analyst who sees upside in Ferrari stock to $340.

Ferrari lifts its guidance for the full year

Ferrari also raised its full-year outlook on Wednesday. It now forecasts €5.8 billion in revenue on up to €6.40 of per-share earnings – roughly in line with expectations.

It left its previous guidance for adjusted EBIT margin this year unchanged at 26%, as per the earnings press release. The Morgan Stanley analyst sees solid growth for the automaker ahead via:

His bull case on Ferrari stock expects it to trade at $420 – up another 33% from here. That assumes the company to very profitably switch to electric vehicles. Its hybrid models made up nearly half of the total shipments in Q2.