Last Update 03 Dec 25

Fair value Increased 3.02%

STLAM: U.S. Turnaround Investments And Product Pipeline Will Shape Balanced Outlook

Stellantis's analyst price target has been modestly raised to about $9.66 from $9.38, as analysts cite gradually improving earnings visibility, a more supportive product pipeline, and balanced Neutral to Buy stances despite ongoing macro and competitive pressures in European autos.

Analyst Commentary

Recent research updates present a mixed but gradually improving picture for Stellantis, with modest target price increases and at least one notable upgrade reflecting better confidence in the company’s medium term trajectory.

Bullish Takeaways

Bullish analysts highlight an improving U.S. inventory backdrop and a more supportive product pipeline, which they expect to drive a recovery in earnings and cash generation over time.
Some see sequential improvement into the second half of 2025 and beyond, supported by new model launches that could enhance pricing power and mix, underpinning upside to current valuation multiples.
The premium auto space is viewed by some as undervalued overall. While Stellantis may not be the prime beneficiary of that theme, its relative value and scale still support a constructive stance for long term investors.
Upgrades in rating and incremental price target hikes signal growing conviction that current market expectations underappreciate Stellantis’s ability to execute on its product plan and stabilize profitability in key regions.

Bearish Takeaways

Bearish analysts maintain Neutral stances, citing tumultuous conditions for European car makers as Chinese competitors expand globally and battery electric vehicle momentum continues to pressure margins and market share.
Tariffs, currency volatility and tightening emissions regulations in the European Union are seen as structural headwinds that could constrain returns on capital and limit upside to earnings forecasts.
The pace of earnings recovery is expected to be gradual rather than rapid, leaving limited room for multiple expansion if execution on new models or cost control falls short.
Despite modest target price increases, the clustering of ratings around Neutral suggests lingering concern that competitive intensity and regulatory costs may cap Stellantis’s growth and valuation re rating in the near term.

What's in the News

Stellantis plans to invest about $10 billion in a U.S. turnaround, with fresh funding expected to be directed to plants in states such as Illinois and Michigan to reinforce the company’s most profitable market (Bloomberg).
The company agreed to sell its Italian VM Motori engine manufacturing unit as part of a broader restructuring aimed at adapting to electrification and shrinking demand for traditional combustion engines in Europe (Reuters).
Stellantis may fully exit its Comau industrial automation business, potentially handing control to private equity firm One Equity Partners as it refocuses on core automotive operations (Bloomberg, Corriere della Sera).
GM and Stellantis will lose significant portions of Canadian tariff exemptions after shifting some production out of Ontario, raising costs on certain U.S.-made vehicles exported to Canada (Bloomberg).
Stellantis CEO Antonio Filosa has urged the European Union to ease what he called unrealistic regulatory targets, warning that rising costs and fierce Chinese competition are eroding the region’s car industry competitiveness (Bloomberg).

Valuation Changes

Fair Value has risen slightly to about €9.66 from €9.38, reflecting a modestly more optimistic view of Stellantis’s medium term earnings power.
Discount Rate has increased marginally to 11.42 percent from 11.28 percent, implying a slightly higher perceived risk or required return for the equity.
Revenue Growth has eased slightly to around 5.9 percent from roughly 6.2 percent, suggesting a more cautious outlook on top line expansion.
Net Profit Margin is essentially unchanged at about 3.85 percent, indicating stable profitability assumptions despite sector headwinds.
Future P/E has risen modestly to around 5.8x from 5.6x, pointing to a small upward adjustment in the multiple investors may be willing to pay for forward earnings.

Electrification initiatives and new model launches position Stellantis to gain market share and fuel revenue growth as electric vehicle adoption accelerates.
Operating margin improvements, strategic product cuts, and investments in software and refreshed brands support future profitability and recurring revenue resilience.
Ongoing operational challenges, regulatory pressures, and competitive threats across core segments are driving margin compression, revenue risk, and significant unpredictability in long-term earnings quality.

Catalysts

About Stellantis

Engages in the design, engineering, manufacturing, distribution, and sale of automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, mobility services, and production systems worldwide.What are the underlying business or industry changes driving this perspective?

Ongoing electrification efforts-including the upcoming launches of multiple new BEV models and technology platforms-are expected to position Stellantis to capture higher market share and support revenue growth in markets where regulatory tailwinds and consumer preference are accelerating the adoption of electric vehicles.
Strong vehicle sales momentum and brand affinity in rapidly expanding markets like the Middle East and Latin America, where rising affluence and population growth drive higher rates of vehicle ownership, are likely to broaden Stellantis' addressable market and deliver earnings upside.
Sequential improvements in operating margins and halved cash flow outflows from 2H 2024 to 1H 2025, combined with a robust liquidity position (25-30% of trailing 12-month revenue), indicate underlying operational progress that could drive higher future net margins and cash generation as near-term headwinds subside.
Management's proactive rationalization of underperforming product lines-including cuts to hydrogen fuel cell programs and restructuring in Europe-should enhance long-term returns on invested capital and eventually support improved EBITDA margins.
Continued investment in software innovation, as well as direct-to-consumer sales and refreshed product launches for key brands (e.g., Ram, Jeep, Fiat), lays the groundwork for future recurring revenue streams and supports gross margin stability-even in a volatile and competitive global landscape.

Stellantis Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Stellantis's revenue will grow by 6.3% annually over the next 3 years.
Analysts assume that profit margins will increase from -1.6% today to 4.3% in 3 years time.
Analysts expect earnings to reach €7.6 billion (and earnings per share of €2.7) by about September 2028, up from €-2.4 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €9.2 billion in earnings, and the most bearish expecting €4.8 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 5.0x on those 2028 earnings, up from -9.4x today. This future PE is lower than the current PE for the GB Auto industry at 47.4x.
Analysts expect the number of shares outstanding to grow by 0.29% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 11.28%, as per the Simply Wall St company report.

Stellantis Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent uncertainty regarding US tariff policy and evolving global trade tensions pose substantial risks, with estimated tariff-related costs of €1–1.5 billion for 2025 directly pressuring net margins and earnings and making long-term revenue planning less predictable.
Weakness in Stellantis' core European light commercial vehicle (LCV) segment, which declined 13% year-to-date and represents a major profit center, suggests exposure to sectoral downturns, regulatory uncertainty, and delayed fleet renewals, threatening sustained revenue and margin performance.
Margin compression resulting from the ramp-up of new battery electric vehicles (BEVs) and related regulatory pressures in Europe is apparent, with management noting lower profitability on BEVs compared to internal combustion vehicles, impacting long-term net margins as electrification accelerates.
Substantial restructuring charges, asset impairments (particularly in Maserati and canceled product programs), and elevated warranty costs collectively signal ongoing operational challenges and execution risk, leading to recurring non-cash and cash charges that can reduce future earnings quality.
Intensifying competition in Europe and North America, highlighted by stagnant or lost market share, especially in fleets and entry segments like Ram, combined with potential cannibalization within Stellantis' broad brand portfolio, raises the risk of further revenue erosion and margin pressure as the industry transitions to EVs and new mobility models.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €9.442 for Stellantis based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €14.0, and the most bearish reporting a price target of just €6.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €175.3 billion, earnings will come to €7.6 billion, and it would be trading on a PE ratio of 5.0x, assuming you use a discount rate of 11.3%.
Given the current share price of €7.79, the analyst price target of €9.44 is 17.5% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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