FCA: Bernstein dubious about Great Wall story.
(CercleFinance.com) - Sanford C.
Bernstein still rates FCA "market-perform," with a target price of 11 euros, with the broker doubtful that China's Great Wall has the funds or management capacity to take on Jeep.
After Automotive News yesterday said that Great Wall intends to buy Jeep, Bernstein says it struggles to see how such a deal could be structured.
With Jeep valued at 12-15 billion euros at FCA's current multiple, the broker thinks that funding such a deal may require the issue of new shares, and/or significant leverage.
Secondly, Bernstein says that it doubts that FCA ex-Jeep would be viable and attractive, with the company looking very weak, and hence probably unsellable, especially after Sergio Marchionne - who created the modern FCA - will retire in early 2019.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Bernstein still rates FCA "market-perform," with a target price of 11 euros, with the broker doubtful that China's Great Wall has the funds or management capacity to take on Jeep.
After Automotive News yesterday said that Great Wall intends to buy Jeep, Bernstein says it struggles to see how such a deal could be structured.
With Jeep valued at 12-15 billion euros at FCA's current multiple, the broker thinks that funding such a deal may require the issue of new shares, and/or significant leverage.
Secondly, Bernstein says that it doubts that FCA ex-Jeep would be viable and attractive, with the company looking very weak, and hence probably unsellable, especially after Sergio Marchionne - who created the modern FCA - will retire in early 2019.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.