Fiat Chrysler shares hit a record high on Monday on increasing expectations that the automaker’s desirable Jeep brand will unlock even higher value this year.
The stock jumped over 20 percent last week on a bullish outlook for the auto sector and media speculation that CEO Sergio Marchionne’s last year at the helm could prompt tactical deals such as spin-offs, technology alliances and disposals.
That investor optimism gathered momentum on Monday, with the share cost acquiring another 3 percent after Morgan Stanley experts stated that Jeep– among the main pillars of Marchionne’s turnaround strategy and a crucial profit driver for the group– could make huge strides this year as a worldwide brand.
The Italian-American automaker refused to comment.
Jeep is one of several brands in an FCA portfolio that likewise includes high-end Maseratis, stylish Alfa Romeos and mass-market Fiats.
However it is the Jeep sport utility vehicles (SUVs) that Marchionne sees producing a high-margin brand with international appeal.
“2018 will feature a variety of functional and financial milestones that can speed up investor appreciation of the commercial power of the Jeep brand in a manner that can possibly drive very favorable share cost movements,” Morgan Stanley analysts stated in their report.
The U.S. broker approximates that Jeep could comprise almost 70 percent of the company’s profit this year.
FCA has been retooling some U.S. factories to enhance output of SUVs and trucks while ending production of some sedans to improve success in North America, its biggest market.