Analyzing Adient (NYSE:ADNT) and Ferrari (NYSE:RACE)

Ferrari (NYSE:RACE) and Adient (NYSE:ADNT) are both auto/tires/trucks companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Risk and Volatility

Ferrari has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Adient has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500.

Insider & Institutional Ownership

92.4% of Adient shares are held by institutional investors. 0.9% of Adient shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Ferrari and Adient”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ferrari	$8.08 billion	9.68	$1.81 billion	$10.11	33.07
Adient	$14.54 billion	0.11	-$281.00 million	($3.62)	-5.55

Ferrari has higher earnings, but lower revenue than Adient. Adient is trading at a lower price-to-earnings ratio than Ferrari, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Ferrari and Adient, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ferrari	0	6	8	3	2.82
Adient	2	6	4	0	2.17

Ferrari presently has a consensus target price of $475.61, suggesting a potential upside of 42.23%. Adient has a consensus target price of $27.67, suggesting a potential upside of 37.80%. Given Ferrari’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Ferrari is more favorable than Adient.

Profitability

This table compares Ferrari and Adient’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ferrari	22.36%	43.40%	16.65%
Adient	-2.06%	8.18%	1.89%

Summary

Ferrari beats Adient on 11 of the 15 factors compared between the two stocks.

About Ferrari

Ferrari N.V., through its subsidiaries, engages in design, engineering, production, and sale of luxury performance sports cars worldwide. The company offers range, special series, Icona, and supercars; limited edition supercars and one-off cars; and track cars. It also provides racing cars, and spare parts and engines, as well as after sales, repair, maintenance, and restoration services for cars; and licenses its Ferrari brand to various producers and retailers of luxury and lifestyle goods. In addition, the company operates Ferrari museums in Modena and Maranello; Il Cavallino restaurant in Maranello; and theme parks in Abu Dhabi and Spain. Further, it provides direct or indirect finance and leasing services to retail clients and dealers; manages racetracks; develops and sells a range of apparel and accessories; and operates franchised and owned Ferrari stores. The company also sells its products through a network of authorized dealers operating points of sale, as well as through its website. The company was founded in 1947 and is headquartered in Maranello, Italy.

About Adient

Adient plc engages in the design, development, manufacture, and market of seating systems and components for passenger cars, commercial vehicles, and light trucks. The company's automotive seating solutions include complete seating systems, frames, mechanisms, foams, head restraints, armrests, and trim covers. It serves automotive original equipment manufacturers in North America and South America; Europe, Middle East, and Africa; and the Asia Pacific/China. Adient plc was incorporated in 2016 and is based in Dublin, Ireland.