uploads/2019/04/4-28.png

Why Did Fiat Chrysler’s Revenues Fall in Q1?

By

Updated

Fiat Chrysler

Analysts’ target price on Fiat Chrysler (FCAU) has fallen in the past year. As of April 29, the company’s forward EV-to-EBITDA multiple was 1.8x, much lower than General Motors’ multiple (GM) of 8.7x and Ford’s (F) multiple of 12.8x based on its estimated EBITDA for the next 12 months. Fiat Chrysler’s high debt position and its low profitability could be two of the key reasons why its valuation is much lower than its direct peers. We’ll discuss what analysts expect from Fiat Chrysler’s first-quarter revenues.

Article continues below advertisement

Revenue estimates

Analysts expect Fiat Chrysler’s first-quarter revenues to be ~25.3 billion euros—down ~6.3% compared to 27.0 billion euros in the first quarter of 2018.

Fiat Chrysler generates a large portion of its revenues from the US market. In the first quarter, the company’s US sales fell ~3% to 498,425 vehicle units. The company’s Fiat and Chrysler vehicle sales in the United States fell ~45% and ~32% YoY (year-over-year), respectively, which could hurt its revenues. The company’s Ram brand sales rose ~21% in the quarter ending in March, which could act as tailwinds to its revenues.

General Motors (GM), Toyota (TM), and Ford (F) also generate a large portion of their revenues from the US market.

Current revenue trend

In the fourth quarter of 2018, Fiat Chrysler reported 30.6 billion euros in revenues—up 6.0% on a YoY basis. During the quarter, the company’s consolidated shipments rose ~2.4% YoY to 1.16 million vehicle units, which improved its revenues for the quarter.

Advertisement

More From Market Realist