This global automaker is seeing a resurgence in its brands, yet the shares trade at a P/E of just 6.
Fiat Chrysler Automobiles N.V. (FCAU)
From Technology & Opportunity
Established in 2014 through the merger of Fiat and Chrysler, Fiat Chrysler Automobiles N.V. (FCAU) is currently the eighth largest automaker in the United States. The holding company is headquartered in London and operates through two main subsidiaries: FCA Italy and FCA USA. The company’s auto brands include Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Ram Trucks, and Ferrari.
In the future, the Technology and Opportunity team believes Fiat Chrysler is a prime candidate for purchase by Waymo, Google’s self-driving car division.
Fiat Chrysler Automobiles US reported sales for September 2018. The total number of sold units was 199,819, which is a 15% increase from the sales reported in September 2017. Robust sales growth was led by the Jeep and Ram brands of FCA.
Jeep brand sales increased by 14% to 83,764. This was Jeep’s ninth monthly record for total sales and the sixth time in 2018 when Jeep sales surpassed the 80,000 mark. The sales of Cherokee brand rose by 87%, and that of Compass brand increased by 46%.
Ram brand sales increased by 9% to 56,447 vehicles, and it was the best September for Ram since it was first introduced. The sales of Ram light-duty increased by 18% to reach 36,658, and it was the highest ever month of sales for light-duty. The sales of the Alfa Romeo brand increased by 29% to 1,639 vehicles. The Dodge brand reported an increase of 41% to 42,101, after a decline in the sales in the previous month. On the other hand, the sales of Chrysler brand declined by 7%, and that of the FIAT brand declined by 46%.
FCA Mexico also reported September sales of 7,485 units. Fiat brand sales increased by 4% compared to 2017, and Dodge Grand Caravan achieved the best sales ever. Jeep Wrangler achieved the 10th consecutive month of sales growth, and the sales of Mitsubishi Montero improved by 15%. Ram ProMaster Rapid also reported the best sales ever.
FCA Canada reported September 2018 sales of 17,698 vehicles. The sales of Jeep brand went up by 25%, Jeep Wrangler sales increased by 62%, and Jeep Grand Cherokee sales went up by 31%.
Chrysler reported sales of 532 vehicles, and Dodge reported sales of 4,717 vehicles for September 2018.
We rate Fiat Chrysler a ‘Buy’ under $23.00. The risk level is “Low.”
Jason Stutman, Technology & Opportunity, www.angelpub.com, 877-303-4529, October 2018