In all four quarters of 2016, Fiat Chrysler (FCAU) managed to post stronger profit margins due to solid truck sales figures. Fiat Chrysler stock has risen about 50% in the last year as of March 16, 2017. The positive return is much higher than its direct peers (FXD) including General Motors (GM), Ford (F), and Toyota (TM). Now, let’s find out if the ongoing rally in Fiat Chrysler stock can continue.
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According to the latest data compiled by Reuters, out of the 27 analysts covering Fiat Chrysler, 36.0% gave the stock a “buy” recommendation, 39% gave a “hold” recommendation, and 25% gave a “sell” recommendation.
As of March 16, 2017, Fiat Chrysler’s consensus 12-month target price was $14.20. It reflects an impressive upside potential of ~22.6% from its market price of $11.58.
On January 12, 2017, the US Environmental Protection Agency alleged that Fiat Chrysler might be using hidden software to violate the Clean Air Act. Jeep and Ram brand models sold by the company’s US division could be impacted by these allegations. A Reuters report suggested the provision of a $4.6 billion maximum fine for such violations.
If a hefty fine is imposed on Fiat Chrysler after the investigation, it could hurt investors’ sentiment and turn its stock downward. It could be the primary reason why most analysts suggest a “hold” on Fiat Chrysler stock.
Next, we’ll explore what analysts recommend for Toyota.