What Analysts Are Saying about Fiat Chrysler Stock



Fiat Chrysler stock in 3Q17

In the first half of 2017, Fiat Chrysler stock (FCAU) rose 16.6%. This positive return was much higher than that seen by peers General Motors (GM), Toyota (TM), and Ford Motor (F).

In 3Q17 so far, FCAU’s journey upward has accelerated, and as of August 28, it had gained 40.8% quarter-to-date. Let’s look at some key factors that might be driving Fiat Chrysler stock and analysts’ recommendations.

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Analysts’ views on Fiat Chrysler

According to data compiled by Reuters, about 38% of analysts covering FCAU recommend “buy.” Another 38% advised investors to remain cautious and gave “hold” recommendations. The remaining 24%, or seven of 26 analysts, gave “sell” recommendations. On August 28, Fiat Chrysler’s consensus 12-month target price was $18.04, reflecting an impressive upside potential of about 21% from its market price of $14.91.

Positive factors in August 2017

In the last five quarters, Fiat Chrysler’s profitability has improved significantly. The company’s higher truck sales and efforts to drive manufacturing efficiency have boosted its profit margins. In the second quarter, FCAU reported an adjusted EBIT (earnings before interest and tax) margin of 6.7%, much wider than its 5.8% margin in the same quarter of 2016.

According to a Reuters report, Chinese auto giant Great Wall Motors has confirmed its interest in acquiring a part of Fiat Chrysler’s business operations. While no deal has been finalized, this news has made FCAU investors optimistic. Despite these recent improvements, FCAU still has a narrower profit margin than peers (FXD) GM, Ford, and Toyota. Next, we’ll see what analysts are recommending for Toyota in August 2017.


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