Fiat Chrysler (FCAU) Stock Slides on Ratings Downgrade

Fiat Chrysler (FCAU) stock is lower this morning after Barclays lowered its rating on shares by two notches to 'underweight.'
By Rachel Graf ,

NEW YORK (TheStreet) -- Shares of Fiat Chrysler Automobiles (FCAU) - Get Report are declining 3.35% to $5.49 in Wednesday morning trading following a ratings downgrade to "underweight" from "overweight" at Barclays in a note released earlier today.

The firm cut its price target on shares of the London-based automobile manufacturer to 5.50 euros from 10 euros.

The auto sector is likely to experience volatility following Britain's recent decision to exit the European Union, Barclays noted. 

Specific to Fiat Chrysler, the company's balance sheet has made the stock too risky to own despite year-to-date underperformance and high short interest, the firm contended.

"In an environment where US earnings quality is under pressure and European demand likely less robust than prior forecasts, FCA could end-up being the least attractive OEM to own," Barclays said.

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Fiat Chrysler's strengths such as its increase in net income, revenue growth and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and disappointing return on equity.

You can view the full analysis from the report here: FCAU

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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