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Fiat Chrysler Automobiles: Last Year’s Winner, Loser so far in 2016

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Apr. 15 2016, Published 4:30 p.m. ET

Fiat Chrysler 1Q16 earnings

The Italian-American automaker, Fiat Chrysler Automobiles (FCAU) is going to release its 1Q16 earnings report on April 26, 2016. Currently, the company is the seventh-largest automaker in the world. Before we explore what analysts are estimating for FCAU’s 1Q16 earnings, let’s find out how the company’s stock fared in the first quarter of 2016.

Fiat Chrysler Automobiles: Last Year's Winner, Loser so far in 2016

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Is last year’s winner this year’s loser?

In 2015, Fiat Chrysler Automobiles delivered impressive returns of 20.8%. Meanwhile, other mainstream automakers (XLY) such as General Motors (GM) and Ford Motor Company (F) gave negative returns. Notably, in 2015, FCAU’s gains were much higher than of Honda’s (HMC) 8.2% and Tesla’s (TSLA) 7.9%. The optimism in FCAU’s stock was primarily backed by the company’s good performance in North America and higher-than-estimated earnings.

However, the story in 2016 has been entirely different so far. In 1Q16, the company’s stock underperformed its peers and delivered a return of -12.3%. As of April 12, 2016, Fiat Chrysler has almost erased all of last year’s gains, with a price action of -20.3% YTD (year-to-date).

This drop was primarily driven by the broader market sell-off along with a revision in the company’s business strategy earlier this year. Although under this revision, Fiat Chrysler raised its growth targets for 2018, it also delayed the relaunch of its Alfa Romeo luxury brand. This could explain the YTD dip in the company’s stock.

Series overview

In this series, we’ll explore what analysts estimate for Fiat Chrysler’s 1Q16 and beyond. This will include revenues and margins estimates ahead of the company’s 1Q16 earnings release. We’ll also discuss the key updates can be expected from FCAU’s upcoming earnings and take a look at the company’s valuation multiples and key technical price levels.

Let’s start by analyzing the trend reflected in the company’s earnings per share and analyst estimates for FCAU’s 1Q16 earnings.

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