According to Bloomberg, 46.7% of total analysts covering Fiat Chrysler (FCAU) have given the stock “‘buy” recommendations, while 36.7% of analysts have recommended a “hold.” Five analysts (out of 30) expect the company’s stock price to remain weak and have given “sell” recommendations.
Investors should pay attention to analyst recommendations because recommendations can affect the company’s stock price movement. If well-known analysts change their views, a significant short-term movement in the stock price could result.
As of April 14, 2016, FCAU’s consensus 12-month target price is $9.79, with an upside potential of 29.2% from the CMP (current market price) of $7.58.
Among notable analysts, Stefan Burgstaller of Goldman Sachs and Kristina Church of Barclays are maintaining a positive view on the company, with target prices of $12.7 and $11.02, respectively. On the contrary, Mike Dean of Credit Suisse expects the stock to underperform in the next year, targeting $4.98, which represents a ~34% drop from the CMP.
Peer group recommendations
Analysts have given the following 12-month return potential estimates for peer auto companies (FXD):
- 52.2% of analysts gave General Motors (GM) a “buy,” with a 27.1% upside potential.
- 40.9% of analysts gave Ford Motor (F) a “buy,” with 18.3% upside potential.
- 47.8% of analysts gave Tesla Motors (TSLA) a “buy,” with just 2% upside potential. (Recently, the company unveiled its first mass-market vehicle Model 3.)
- 62.5% of analysts gave Ferrari (RACE) a “buy,” with 12.2% upside potential.
Among FCAU’s closest peers, the majority of analysts are optimistic about General Motors. In the past year, GM has been trying to explore new areas of business to maintain the pace with changing auto industry dynamics.
Apart from unveiling its much-anticipated Chevrolet Bolt, GM also announced its plan to expand its presence in the car sharing business. (You can read about GM’s car sharing business in the series Car-Sharing: A Different Kind of Car Race for General Motors.)
Now let’s look at analyst estimates for Fiat Chrysler’s revenues in 1Q16 and beyond.