Jeep could be better off without Fiat Chrysler, according to a note from one Wall Street analyst.
Morgan Stanley analyst Adam Jonas issued a research note Monday that walks through a sum-of-the-parts analysis that suggests Jeep is worth more than Fiat Chrysler. The analysis puts Jeep's value at 120 percent of Fiat Chrysler's market capitalization.
The iconic off-road vehicle brand alone could account for nearly half of all Fiat Chrysler's sales by 2018, Jonas said.
Jeep has become a tremendously popular brand over the last several years, Jonas said. The company sold more than 1.4 million Jeeps worldwide in 2016. That is a four-fold increase over 2009, when Fiat took over Chrysler.
At the moment, Fiat management has not publicly discussed any plans to spin off the brand. However, on an earnings call in April Jonas asked Fiat Chrysler CEO Sergio Marchionne if he would consider spinning off both the Jeep and Ram brands. Marchionne simply said "yes."
Such a deal might be similar to Fiat's spinoff of its high-end Ferrari brand in late 2015 and early 2016.
Without Jeep, Fiat Chrysler would still have auto brands Ram, Chrysler, Dodge, Fiat, Alfa Romeo and Maserati, along with a components business.
Jonas expects Marchionne will leave Fiat Chrysler by the end of 2018 in order to devote his full attention to Ferrari. This could trigger the spinoff plans.
"Given the importance and complexity of realizing the hidden value of Jeep, we see the catalyst path as very much aligned with Sergio's remaining time at FCA," Jonas said.
A representative from Jeep was not immediately available to comment.