Credit: Shutterstock photoShares of Fiat Chrysler FCAU jumped over 5% in premarket trading Wednesday after Barclays BCS upgraded the automaker's stock.
Barclays analyst Brian Johnson upgraded Fiat Chrysler from "equal weight" to "overweight," citing his belief that the Italian-American automaker is one of the onlyoriginal equipment manufacturers or traditional automotive companies with strong earnings momentum .
The analyst also noted that investors might undervalue the potential windfall an increase to the company's light truck capacity could provide, and he mentioned that Fiat Chrysler has strong strategic options going forward.
Johnson pointed to the fact that the company's CEO, Sergio Marchionne, is set to step down from his position in 18 months. The analyst contends that Marchionne will focus on multiple strategic options to help fuel value for Fiat Chrysler shareholders before he walks away.
The Barclays upgrade comes amid reports of multiple suitors for the company's Jeep division. The sports utility brand now sells roughly 1.4 million vehicles a year globally, which is more than almost any other U.S. car brand .
Shares of Fiat Chrysler popped premarket in the wake of the upgrade. FCAU climbed over 5% in morning trading to hit a new all-time intraday trading high of $16.46 a share.
The company is currently a Zacks Rank #3 (Hold) and scored an "A" for both Value and Growth in our Style Scores system.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
