Jefferies Starts Fiat Chrysler Automobiles NV (FCAU) at Buy
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Jefferies initiates coverage on Fiat Chrysler Automobiles NV (NYSE: FCAU) with a Buy rating with a €7.5 price target.
Analyst Philippe Houchois commented, "A more severe downturn triggering cash burn could drive shares as low as €4.2 while de-leveraging of net financial debt and pension suggests upside to €19."
He added, "FCA offers an interesting high risk/reward mix of product-related self-help, high equity leverage and strategic optionality as management continues to explore ways to reduce capital intensity and optimise returns, including through M&A. We think there are many views in the market that, with Ferrari now independent, FCA has run out of options to deleverage. Consistent with our view of a ‘soft cycle’, we see leverage more as valuation opportunity with FCA trading on a price/sales multiple of 8% vs EV/sales of 18%, with additional valuation support from FCA open to various consolidation and cooperation agreements to reduce capital intensity and duplication."
Shares of Fiat Chrysler Automobiles NV closed at $6.77 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesChrysler LLC, Jefferies & Co
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