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Why Most Analysts Seem to Have Turned Cautious on Fiat Chrysler

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Fiat Chrysler Automobiles

Fiat Chrysler Automobiles (FCAU) has risen 1.5% and 2.4% month-to-date and year-to-date, respectively, as of March 28. In 2018, the stock fell 18.9% after posting a massive gain of 96.4% in the previous year to become the highest gainer among auto stocks (FXD) in 2017.

The recent weakness in the company’s stock can be attributed to its management’s weaker-than-expected 2019 outlook, which disappointed many investors and analysts.

Analysts on Fiat Chrysler

At the end of March 2019, only ~22% of the analysts surveyed by Thomson Reuters have recommended “buys” on Fiat Chrysler stock. Most of these analysts (70%) have advised investors to remain cautious on Fiat Chrysler stock and have given it “hold” ratings. The remaining 8% of the 23 surveyed analysts have given FCAU “sell” recommendations.

About six months ago, a much higher percentage of analysts (48%) had recommended “buys” on the company.

On March 28, analysts’ consensus 12-month target price for Fiat Chrysler stock was $23.00 compared to $26.00 about six months ago. Nonetheless, analysts’ current target price also reflects a handsome potential upside of ~55.4% from its current price of $14.8.

Fiat Chrysler’s US sales fell in February

In February 2019, Fiat Chrysler’s US sales totaled 162,036 vehicles, ~2.3% lower than the company’s US sales of 165,903 vehicle units in the same month of 2018. February was the first month during which FCAU’s US sales saw a decline after reporting year-over-year gains for the previous 11 months.

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