Analysts’ Views on Foreign Automakers, Post-October Results

Jitendra Parashar - Author

Nov. 15 2017, Updated 9:00 a.m. ET

Analysts on foreign auto giants

According to data compiled by Reuters, 40% of the 25 analysts covering Fiat Chrysler Automobiles (FCAU) have recommended “buy.” In comparison, about 39% and 41% of the analysts covering Toyota Motor (TM) and Honda Motor (HMC) have recommended “buy.” Currently, Toyota and Honda are covered by 23 and 22 analysts, respectively.

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Consensus price targets

As of November 7, 2017, analysts’ 12-month consensus target price for Fiat Chrysler was $20.48, reflecting an upside potential of about 14.6% from its market price of $17.87. Notably, FCAU stock has risen 96.8% in 2017, and it ended 3Q17 with an impressive 69.2% return.

Analysts’ consensus price target for Honda was $34.26, reflecting a minor positive return potential of 2.2% from its market price of $33.53. In contrast, analysts’ consensus target price for Toyota’s ADRs (American depositary receipts) was $121.42, 4.7% lower than its market price of $127.46.

Analysts’ views on Fiat Chrysler

In October 2017, a higher percentage of analysts were optimistic about Fiat Chrysler than Japanese peers (IYK) Honda and Toyota. As noted earlier in this series, FCAU’s profitability has improved significantly in the last six quarters, which could be why analysts expect its stock to continue trading positively.

For Japanese automakers, concerns such as depreciation of the Japanese yen against the US dollar could continue to hurt earnings from international markets. Honda and Toyota have both warned investors about the yen’s possible impact on their upcoming earnings results. Continue to the next part to learn how Volkswagen’s (VLKAY) US sales were in October 2017.


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