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What Analysts Recommend for Foreign Automakers

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Analysts on foreign autos

According to data compiled by Reuters, 44% of the 23 analysts covering Fiat Chrysler Automobiles (FCAU) gave it a “buy” recommendation. By comparison, about 37% and 43% of analysts covering Toyota (TM) and Honda (HMC) gave them “buy” recommendations, respectively. Currently, 24 and 23 analysts cover TM and HMC, respectively.

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12-month consensus target

As of January 9, Wall Street analysts’ 12-month consensus target price of FCAU was $23.82, which reflected an upside potential of about 8.4% from its market price of $21.97. Fiat Chrysler stock has already risen 23.2% in January so far after ending 4Q17 with a minor drop of 0.4%.

Analysts’ consensus price target for Honda was $36.92, which reflected a positive return potential of 3.9% from its market price of $35.52. In contrast, analysts’ consensus target price for Toyota’s ADR (American depository receipt) was $125.87, which was already about 5.9% lower than its market price of $133.72.

Comparing analysts’ views

In January 2018, a higher percentage of analysts seems to be optimistic about Fiat Chrysler as compared to its Japanese peers (IYK), HMC and TM. As noted earlier in this series, Fiat Chrysler’s profit margins have improved significantly in the last six consecutive reported quarters. This improvement along with high expectations from FCAU’s 4Q17 results could be two main reasons why analysts expect its stock to continue to soar going forward.

Japanese automakers are concerned that the depreciating Japanese yen against the US dollar could continue to hurt their upcoming results from international segments.

Continue to the next part to learn how Volkswagen’s (VLKAY) US sales were in December 2017.

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