After yesterday's race, the Fiat Industrial stock is retraced today in Piazza Affari. The Lingotto division active in the commercial vehicle sector gained three points in the last trading session, following the publication of a good quarterly report. This morning, however, is time for realizations: investors aim to monetize yesterday's gains and reverse course on the stock, which loses just over a point.
The company's third quarter closed with revenues up 7,9% year-on-year thanks to "strong growth in the farm equipment business, which more than offset weaker market conditions in the other businesses." Trading profit increased by 91 million compared to the same period of the previous year, reaching 575 million euros, while the margin on revenues reached 9,1% (+0,8% on an annual basis). A real leap forward in net profit, which went from 204 million euros in the third quarter of 2011 to the current 297 million, with a growth of 45,6%.
However, net industrial debt also rose, rising by 0,2 billion to 2,2 billion euro. Available liquidity decreased from 5,7 billion euros in the second half to 4,9 billion.
Fiat Industrial's forecasts for the current year speak of revenues of over 25 billion euros, trading profit of more than 2 billion and net industrial debt of between 1,2 and 1,5 billion euros.
After the publication of these numbers, Société Générale raised its target price from 8,4 to 8,5 euros, confirming hold, after raising its EPS estimates by 8% for 2012 and 6% for 2013-2014 respectively at 0,70 euro, 0,85 euro and 0,94 euro. Banca Akros, on the other hand, lowered the target price from 11 to 10,50 euros, after adjusting the estimates to discount a higher level of capex and net debt: net profit at the end of the year is now expected at 842 million euros, -10% compared to the 944 million previously forecast, and the net debt to 1.400 million from 949 million. “The investment case remains intact: buy,” they tell the bank.
Cheuvreux also maintained the outperform rating (target in euros) while warning that there is a risk of a reduction in consensus on EPS. Cheuvreux's 2013 eps estimate on Fiat Industrial is 0,83 euros, more than 10% below the consensus estimate, at 0,93 euros.
