Jefferies Starts Fiat Chrysler Automobiles NV (FCAU) at Buy

August 9, 2016 7:18 AM EDT
Get Alerts FCAU Hot Sheet
Price: $9.94 +2.79%

Rating Summary:
    4 Buy, 4 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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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."

For an analyst ratings summary and ratings history on Fiat Chrysler Automobiles NV click here. For more ratings news on Fiat Chrysler Automobiles NV click here.

Shares of Fiat Chrysler Automobiles NV closed at $6.77 yesterday.

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