- Fiat is trying to push that its brand is stylish and hip, but it may have gone too far.
- Sales rose 18% in May and 17% since the beginning of the year, but the new ad campaign may cause a slowdown.
- Fiat's new ad campaign is courageous but very risky. Fiat should focus its marketing on its practicality and quantifiable facets instead of offending the senses.
- Fiat Chrysler Automobiles (FCA) presented recently its ambitious five-year strategic plan, aiming at strong growth and higher profitability during 2014-2018.
- Its targets are mainly dependent on major expansion of both the Jeep and Alfa Romeo brands, which are expected to post unit sales CAGR of 22% and 40%, respectively.
- No equity issuance is expected, net debt should be stable until 2016, and free cash flow should improve, something that the market is clearly questioning if it is reasonable.
- Despite the low likelihood of this plan being achievable, Fiat has good value over the long term, even if the company does not completely deliver on its targets.
Fiat Chrysler: The Valuation Is Cheap Even If You Do Not Believe In The 2018 Targets
- Investors gave little credit yesterday to Fiat’s 2018 targets: the group plans notably to increase its net income to around EUR5bn in 2018 from EUR0.9bn in 2013.
- They also remained concerned about the group’s balance sheet.
- But we remain confident that a mix of capital increase, disposals and improving cash generation will gradually reduce the group’s debt and the stock beta and sustain the rerating.
- Even assuming a 30% miss on 2018 targets and a capital increase, the stock’s 2018 P/E would be cheap around 3.5x.
- Cheap valuation – absolute and especially on relative basis vs General Motors and Ford.
- A very solid CEO - Sergio Marchionne was the 5th CEO in just 2 years before he took over in 2004.
- Boost from recent Chrysler acquisition - Fiat is now the 7th largest auto company in the world.
- Bad economic conditions in Southern Europe - have affected the company negatively.
- New premium strategy - less vulnerability to cyclical economic downturns.
A Call On The European Car Industry: Long Peugeot, Short Fiat
- How to get exposed to a recovery of European car industry? Be long Peugeot, short Fiat.
- Peugeot's new "ticket," with Tavares as CEO and Gallois as chairman, is very promising.
- Product lineup is far richer at Peugeot than at Fiat.
- Geo mix: A call option on China for Peugeot, vs. U.S. exposure for Fiat.
- Valuation: Two cash-burning companies, but Peugeot looks cheaper on multiples.
Yesterday, 10:31 AM| Comment!
Yesterday, 7:55 AM
- Fiat Chrysler Automobiles (NYSE:FCAU) plans to issue a $2.5B convertible bond and offer $100M worth of shares to help fund its aggressive growth plans.
- Shareholders opting in now for the convertible offering will receive shares in Ferrari as part of the transaction.
- "Today is a big clean-up day," says CEO Sergio Marchionne about the flurry of moves.
Wed, Oct. 29, 10:56 AM
Wed, Oct. 29, 9:35 AM
Tue, Oct. 28, 9:46 AM
- Fiat Chrysler Automotive (NYSE:FCAU) says its highest-ranking quality exec, Doug Betts, has left the company to pursue other interests.
- Insider Matthew Liddane was tapped by the automaker to fill the position.
- Earlier this week, Fiat Chrysler brands rated poorly on a study of reliability conducted by Consumer Reports.
- Consumer Reports: "Fiat-Chrysler sits at the bottom of the pack, with four of its brands—Dodge, Ram, Jeep, and Fiat—sweeping our least-reliable rankings."
Mon, Oct. 27, 10:43 AM
- Kelley Blue Book forecasts new-vehicle sales in the U.S. will increase 5.4% Y/Y to 1.27M units in October.
- The research firm warns that the ratio of incentive spending to ATP (average transaction price) is at the highest level in the industry since 2010.
- The compact SUV/crossover segment is expected to see the strongest growth rate during the month at 13.6%.
- KBB sales forecast by manufacturer: General Motors (NYSE:GM) +4.2% to 236K; Toyota (NYSE:TM) +5.9% to 179K; Ford (NYSE:F) -3.3% to 185K; Chrysler Automotive Group (NYSE:FCAU) +19.2% to 167K; Honda (NYSE:HMC) +4.8% to 114.5K; Nissan (OTCPK:NSANY) +12.1% to 102K; Hyundai (OTC:HYMLF) +6.1% to 99K; Volkswagen (OTCQX:VLKAY) +2.9% to 46K.
Sat, Oct. 25, 9:27 PM
- The Transportation Department will conduct an internal review of the National Highway Traffic Safety Administration in response to a series of recent safety failures, including this week's 7.8M vehicle recall, Reuters reports.
- The House of Representatives' Energy and Commerce Committee is to hold an initial briefing with U.S. safety regulators next week to learn the details of the regional recalls affecting 10 automakers - Toyota (NYSE:TM), Honda (NYSE:HMC), Mazda (OTCPK:MZDAY), BMW (OTCPK:BAMXY), Nissan (OTCPK:NSANY), Mitsubishi (OTC:MMTOY), Subaru (OTCPK:FUJHY), Chrysler (NYSE:FCAU), Ford (NYSE:F) and General Motors (NYSE:GM).
- It was reported on Friday that the Obama administration will likely nominate a permanent chief of the NHTSA within two weeks.
Wed, Oct. 22, 2:35 AM
- The NHTSA has expanded its warning about faulty airbags made by Takata (OTCPK:TKTDY) to 6.1M U.S. vehicles.
- "The National Highway Traffic Safety Administration urges owners of certain Toyota (NYSE:TM), Honda (NYSE:HMC), Mazda (OTCPK:MZDAY), BMW (OTCPK:BAMXY), Nissan (OTCPK:NSANY), Mitsubishi (OTC:MMTOY), Subaru (OTCPK:FUJHY), Chrysler (NYSE:FCAU), Ford (NYSE:F) and General Motors (NYSE:GM) vehicles to act immediately on recall notices to replace defective Takata airbags," it said in a statement.
- The previous warning, issued on Monday, covered 4.7M vehicles.
- Update: Recall has been expanded to 7.8M vehicles.
Fri, Oct. 17, 7:40 AM
- Automobile registrations rose 6.4% to 1.235M vehicles in September, according to the European Automobile Manufacturers Association.
- A strong rate of growth was seen across European Union nations.
- The month included an extra selling day compared to a year ago.
- Sales growth by automaker: Volkswagen (OTCQX:VLKAY) +6.7%, Peugeot (OTCPK:PEUGY) +9.8%, Fiat (NYSE:FCAU) +6.1%, General Motors (NYSE:GM) -5.9, Renault (OTC:RNSDF) +10.7, Daimler (OTCPK:DDAIF) +5.2%, Toyota (NYSE:TM) +0.4%, Ford (NYSE:F) +6.7%, BMW (OTCPK:BAMXY) -1.0%, Nissan (OTCPK:NSANY) +16.9%, Hyundai (OTC:HYMLF) +6.3%, Mazda (OTCPK:MZDAY) +26.4%, Subaru (OTCPK:FUJHY) +8.5%, Jaguar Land Rover (NYSE:TTM) +3.9%.
Thu, Oct. 16, 11:32 AM
- An American model has cracked the top ten in Japan's Car of the Year competition for the first time ever with the new Jeep Cherokee slotting in at number eight.
- Though the 2015 Mazda2 (OTCPK:MZDAY) landed the big trophy, the Cherokee's strong reception in Japan is in the words of Autoblog.com a "seriously big deal" for Fiat Chrysler Automotive (NYSE:FCAU).
Thu, Oct. 16, 8:10 AM
- Fiat Chrysler Automotive (NYSE:FCAU) recalls 900K vehicles in separate recall actions.
- The first broad recall of 470K cars and SUVs is tied to a problem with an amp alternator.
- The second recall of 437K Jeep Wranglers from the model years 2011 to 2013 is due to the risk of an electrical short in the power mirror.
Tue, Oct. 14, 9:32 AM| Comment!
Mon, Oct. 13, 4:32 PM
- Fiat Chrysler Automotives (NYSE:FCAU) ended its first day on the NYSE down 0.9% from the opening price of shares.
- Secondary shares listed in Milan closed with a 4% gain.
- Fiat Chrysler CEO Sergio Marchionne talked up the automaker on the floor of the exchange during the day: "One of the Detroit Three is coming home."
- Automobile analysts see the bigger story as the ambitious plan of the company to boost vehicles by 60% to 7M per year by 2018. Many see Marchionne's goal as a bit too high.
Mon, Oct. 13, 9:49 AM
- Fiat Chrysler Automotive (NYSE:FCAU) begins trading on the NYSE at $9 per share.
- Shares drove to as high as $9.40 in the first batch of trades.
Sun, Oct. 12, 5:53 AM
- Fiat (OTCPK:FIATY, OTCPK:FIADF) confirms the execution of its merger deed with Chrysler at a ratio one Fiat share for one FCA share (Fiat Chrysler Automobiles).
- Shares will begin trading under the symbol FCAU tomorrow morning.
- Note: Seeking Alpha alert subscribers to FIATY and FIADF will be auto-subscribed to the new symbol FCAU.
Wed, Oct. 8, 1:53 PM
- The EPA says the fuel economy of 2013 models sold in the U.S. averaged 24.1 mpg, up half a mpg from the prior year's model.
- The modest 2.1% improvement is below the pace called for by some environmental groups and just a fraction of what would be needed to keep pace with the government's target for a 54.5 average mpg for the 2016 model year.
- A higher mix of SUV and truck sales offset technology gains by automakers.
- Related stocks: GM, F, TM, OTCPK:FIATY, HMC, OTCPK:NSANY, TSLA, OTCQX:VLKAY, OTCPK:DDAIF, OTC:HYMLF, OTCPK:BAMXY, OTC:KIMTF, OTCPK:MMTOF, TTM, OTCPK:SZKMY, OTCPK:FUJHY, HMC, FCA.
FCAU vs. ETF Alternatives
Other News & PR