UniCredit Bank Reiterates its BUY Rating on Fiat Stock, Target Price Reduced

October 01 00:00 2011

LONDON, October 1 (RainbowNewsLine.com) – Analysts at UniCredit Bank maintain their BUY rating on Fniat stock (FIA.MI), while reducing their estimates for the company. The target price has been reduced from €9.10 to €6.80.

In a research note published yesterday, analysts at UniCredit Bank mention that the downward revision in estimates is to reflect the increasing concerns surrounding the global macroeconomic scenario. The analysts, however, express their positive view on Fiat based on three main reasons.

  1. There is upside potential even after reducing the estimates
  2. Scenarios the current share price reflect too pessimistic
  3. Investors perceive Fiat as a pure mass market player exposed to Italy, which is not true.

Investor decisions are being influenced by macroeconomic concerns, and segments such as mass passenger car market get affected in such a scenario, the analysts say. PSA, Renault and Fiat in Europe and Ford and GM in the US are one of the worst performing stocks year to date with a significant decline in share prices, the analysts mention. Although the analysts are concerned about Fiat’s cash generation, they are bullish than the consensus estimates.

Investment Highlights

Share price discounting a too pessimistic scenario

Stock Triggers

Restructuring of Fiat Auto’s operations in Europe

IPO of Ferrari

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