Will Fiat Chrysler (FCAU) Stock Be Affected by Inflated Sales Numbers?

Fiat Chrysler (FCAU) stock is up on Monday afternoon, despite the revelation that the automaker was inflating U.S. sales figures.
By Natalie Walters ,

NEW YORK (TheStreet) -- Shares of Fiat Chrysler (FCAU) - Get Report are up by 0.58% to $6.90 in mid-afternoon trading on Monday, despite a new report showing that the company was inflating U.S. sales numbers, Automotive News reports. 

U.S. regulators' internal review of the company began in 2015 and discovered that the company was exaggerating sales figures partly because of the pressure to keep up its year-over-year monthly sales increase. 

Sales were inflated by 5,000 to 6,000 vehicles, according to the report. 

The London-based automaker has been reporting year-over-year monthly sales increases for over six years. 

The company's nine U.S. business centers have a turnover rate that's four times higher than the rest of the company, because executives place so much pressure on staff to deliver high sales numbers.

The FBI and the Securities and Exchange Commission began investigating the company earlier this year after the Napleton Automotive Group accused Fiat Chrysler executives of pressuring sales staff to alter sales numbers. 

Separately, 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. TheStreet Ratings has this to say about the recommendation:

We rate FIAT CHRYSLER AUTOMOBILES NV as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, 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, disappointing return on equity and poor profit margins.

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

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