Analysts on foreign automakers
According to data compiled by Reuters, 46.0% of the 26 analysts covering Fiat Chrysler (FCAU) gave it a “buy” recommendation. In comparison, 40.0% and 42.0% of analysts covering Toyota (TM) and Honda (HMC), respectively, gave them “buy” recommendations.
Their 12-month target prices
As of September 6, 2017, Wall Street analysts’ 12-month consensus target price for Fiat Chrysler was $20.51. That reflects an upside potential of 25.1% from its market price of $16.39. FCAU stock has already risen 80.5% so far in 2017 and is trading with 54.8% gains so far in 3Q17.
Analysts’ consensus target price of $32.20 for Honda Motor reflects an upside potential of 14.7% from its market price of $28.08. Analysts’ consensus target price for Toyota’s ADR (American depositary receipt) was $110.53, which was 2.8% lower than its market price of $113.73.
Analysts’ view of Fiat Chrysler
Currently, a higher percentage of analysts are positive on Fiat Chrysler than they are on its Japanese peers (IYK) Toyota and Honda. Fiat Chrysler’s profitability has improved significantly in the last five quarters. That could be the primary reason that analysts expect the stock to continue soaring in the near term.
For Japanese automakers, there are concerns about the depreciating Japanese yen against the US dollar, which is expected to hurt their international market earnings in the next few quarters. Toyota and Honda both have warned investors about a continued negative impact of the weak Japanese currency on their upcoming earnings.
In the next part, we’ll look at Volkswagen’s (VLKAY) US sales for August 2017.