Chrysler Could Add Value to Fiat, Analysts Say
TURIN – Chrysler Group's fortunes will be crucial in creating value for shareholders of the new automotive-focused Fiat S.p.A.
Chrysler could add between 2.75 euros and 5.40 euros (about $3.70 to $7.20) per share to Fiat's basic value, according to financial analysts polled by Automotive News Europe.
Fiat's 20 percent stake in Chrysler, currently with a zero book value, is the biggest positive element seen by analysts for the new Fiat S.p.A, which will comprise the Fiat, Alfa Romeo, Lancia, Ferrari and Maserati car brands when it starts trading on Jan. 3. Fiat's truck and tractor units will be spun off on the same day into a new unit called Fiat Industrial S.p.A.
Analysts expect Fiat's shares to be worth about 6.10 euros per share while Fiat Industrial shares will trade at 8.20 euros.
Fiat's automotive business represents 63 percent of the group's expected 2010 total revenues, but analysts give a higher value to the industrial unit's shares because the auto business will have bigger investments to fund and will have lower profit margins.
Fiat shares have traded slightly above 10 euros in recent weeks.
Here are analysts' views:
Morgan Stanley's Stuart Pearson said Fiat's stake in Chrysler and increasing synergies and business between the two automakers could add another 5.40 euros per share to 7.30 euros value he currently envisages for the new Fiat S.p.A.
Max Warburton at Bernstein Research factors in the value of the Chrysler stake at 2.75 euros per share -- more than half of the 5.20 euros he predicts for the new Fiat.
Banca IMI's Monica Bosio factors in 4.50 euros per share related to Chrysler – that is 3.30 euros for the value of Fiat's stake and 1.20 euros in potential synergies – in her 7.40 euro price target for the new Fiat.
More Industry
Honda Embraces Hybrid Fever
The automaker plans a new Ohio factory, along with investments in existing U.S. and Canadian plants, to significantly boost hybrid production here.
Read More →
Dealerships Must Show Up Where It Matters
How car buyers find your dealership has fundamentally changed. New evidence reveals the importance of your presence on social media, Google search, and large language models.
Read More →
CPO Sales Could Take Off in the Right Conditions
A recent Cox Automotive consumer survey reveals the size of an undertapped market for the vehicle segment given affordability pressures.
Read More →
Global Consumer Trends Diverge
Price remains a top consideration for U.S. car buyers, and they are the most brand-loyal consumers to established automakers, according to a new survey.
Read More →
Badger State Dealership Gets New Owner
The longtime southern Wisconsin store moved from one area auto group to another, keeping the business in Dairyland.
Read More →
The Cycle of Negative Equity
Third-quarter data shows consumers still rolling over debt and stretching loan terms, raising their risk of remaining underwater.
Read More →
Charger Network Growth Slows
Despite a projected increase in public EV chargers in 2026, charging infrastructure remains a top concern for consumers as the gap between the most and least EV-friendly places remains substantial.
Read More →
Lenders, Consumers Take on More Auto Loan Risk
September records loosened credit access the most in over a decade as buyers took advantage of the conditions to afford trading, though loan applications fell.
Read More →
Next-Gen Hybrids in Sight
Dealerships can expect to see revamped hybrids from Honda next year as the company rolls out a new system and model lineup.
Read More →
Gem State Stores Change Hands
A larger auto group founded in the industry’s early years sold two franchises to a neighbor group that's on a growth spurt.
Read More →