Last Update 18 Apr 26

STLAM: 2027 Earnings Reset And China EV Deals Will Shape Upside

Analyst price targets for Stellantis have been adjusted in a mixed but slightly lower range, with various firms cutting their targets by about €0.50 to €2.20 per share, citing tighter margin expectations for 2026 and a shift toward valuing the stock on later-year earnings.

Analyst Commentary

Recent research on Stellantis reflects a split view, with some analysts adjusting targets slightly higher and others trimming them or changing ratings as they reassess margin assumptions and the timing used in their valuation models.

Bullish Takeaways

Some bullish analysts are comfortable valuing Stellantis on later year earnings, indicating they see potential for improved execution beyond the 2026 transition period.
A raised price target from one major bank, even if modest, signals that not all research shops are revising assumptions in the same direction, which can support a more balanced debate around long term growth.
References to an "upside 90 day catalyst watch" suggest that certain analysts see specific events or data points in the near term that could help close the gap between current pricing and their longer term earnings view.
Where ratings are kept at Neutral after cuts to target prices, bullish analysts appear to see enough operational and cash flow support to avoid a fully bearish stance, even while acknowledging a tougher transition phase.

Bearish Takeaways

Several bearish analysts have lowered price targets in both € and US$, and in some cases moved ratings down to Hold, pointing to pressure on operating margins through 2026 and a less supportive near term earnings profile.
Goldman Sachs and others have cut targets by amounts such as €2 or more, which reflects more cautious assumptions on profitability and possibly higher execution risk in meeting management guidance.
Comments that 2026 is treated as a transition year and that valuation is now anchored on 2027 earnings indicate concern that near term returns may be constrained while the business works through this phase.
The clustering of target reductions from multiple banks in a short timeframe underlines a more conservative stance on both growth and margins, which can cap how much investors are currently willing to pay on a P/E basis.

What's in the News

Stellantis is reported to be exploring carmaking deals with Chinese partner Dongfeng that would span Europe and China, pointing to potential changes in how it sources and builds vehicles across key regions (Bloomberg).
The company is in discussions with Chinese EV maker Leapmotor on developing an Open EV platform, which would sit alongside separate talks to build electric vehicles in Canada with a Chinese partner (Reuters, Bloomberg).
Executives have held talks with China's Xiaomi and XPeng about options to overhaul Stellantis operations in Europe, including possible stakes in Maserati or other brands and investment into European businesses, according to unnamed sources cited in press reports (Bloomberg).
Reports indicate Stellantis is looking to exit its U.S. battery joint venture with Samsung SDI after announcing a charge of over €22 billion, with discussions ongoing and no final decision reported yet (Bloomberg).
ACC, a battery joint venture in which Stellantis is the largest investor, told unions it has shelved plans for gigafactories in Italy and Germany, trimming back a previously announced three-plant European build out (Reuters).

Valuation Changes

Fair value is €8.06 per share, unchanged in the latest update, indicating no adjustment to the core valuation output.
The discount rate is held steady at 11.6%, so the required return used in the model has not shifted.
Revenue growth is trimmed slightly from 3.68% to about 3.65%, reflecting a small change in long term € revenue assumptions.
The net profit margin eases from roughly 3.30% to about 3.25%, pointing to a modestly lower expected € earnings margin.
The future P/E is nudged up from about 5.8x to roughly 5.9x, signalling a slightly higher multiple being applied to later year earnings.

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Key Takeaways

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 3.7% annually over the next 3 years.
Analysts assume that profit margins will increase from -14.6% today to 3.3% in 3 years time.
Analysts expect earnings to reach €5.6 billion (and earnings per share of €1.84) by about April 2029, up from -€22.4 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €9.0 billion in earnings, and the most bearish expecting €3.4 billion.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 5.9x on those 2029 earnings, up from -1.0x today. This future PE is lower than the current PE for the GB Auto industry at 33.7x.
Analysts expect the number of shares outstanding to grow by 0.3% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 11.6%, as per the Simply Wall St company report.

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 €8.06 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 €12.5, and the most bearish reporting a price target of just €4.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be €170.9 billion, earnings will come to €5.6 billion, and it would be trading on a PE ratio of 5.9x, assuming you use a discount rate of 11.6%.
Given the current share price of €7.44, the analyst price target of €8.06 is 7.7% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
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.

Electrification And Global Market Expansion Will Unlock Value