Last Update 03 Apr 26

Fair value Decreased 6.78%

STLAM: 2027 Margin Expansion And EV Partnerships Are Expected To Improve Upside

Analysts have trimmed the implied fair value for Stellantis by about €0.59, reflecting a series of reduced price targets and more cautious assumptions around revenue growth. This has been partially offset by slightly higher profit margin expectations and a lower future P/E of 5.80x.

Analyst Commentary

Recent research updates on Stellantis show a mix of optimism and caution, with several firms adjusting price targets and ratings as they reassess earnings power, margin resilience, and where the shares should trade on a P/E basis.

Bullish Takeaways

Bullish analysts highlight that Stellantis trades on a lower earnings multiple than many peers, which they see as leaving room for valuation to re-rate if the company executes on its plans.
Some research points to investor expectations already being low after several quarters of disappointment, which can reduce downside risk if results simply meet current assumptions.
There is a view among bullish analysts that if Stellantis can deliver faster than expected margin expansion, the shares could see rapid upside relative to current targets.
At least one major bank refers to 2026 as a transition year and values the stock on a later earnings base. This suggests confidence that earnings power beyond the near term still supports the current valuation framework.

Bearish Takeaways

Bearish analysts have trimmed price targets in both € and US$ terms, which directly lowers implied fair value and reflects more cautious assumptions on future earnings and cash generation.
A downgrade to Hold from Buy with a reduced target price signals concern that the risk or execution hurdles tied to management's 2026 guidance could cap upside, especially with pressure on operating margins expected through that period.
Several cuts to targets and Neutral ratings indicate hesitation to underwrite a stronger re-rating until there is clearer evidence on earnings stability and margin trends.
Where target prices have been raised, they are sometimes paired with Hold or Neutral ratings. This suggests that even supportive analysts see a balance of risk and reward rather than an obvious growth story at current levels.

What’s in the News

Bloomberg reports that Stellantis is in talks with a Chinese partner about building electric vehicles in Canada, signaling continued interest in cross border manufacturing and Chinese EV expertise (Bloomberg).
Executives have reportedly met with China's Xiaomi and Xpeng to discuss options for an overhaul of Stellantis operations in Europe, including potential stake sales in Maserati or other brands and possible investments in the group's European business, with the company declining to comment on the discussions (Bloomberg).
Stellantis is said to be looking to exit its U.S. battery joint venture with Samsung SDI after announcing an over €22b charge. Bloomberg cites cost saving efforts and a reassessment of electric vehicle commitments, while noting no final decision has been made (Bloomberg).
ACC, a joint venture in which Stellantis is the largest investor, has told unions it has dropped plans for gigafactories in Italy and Germany. This includes shelving projects in Termoli and Kaiserslautern that were previously part of a three plant European battery build out (Reuters).
CNBC reports that Stellantis is scrapping production of its plug in hybrid Jeep Wrangler, Jeep Grand Cherokee and Chrysler Pacifica, citing waning customer demand, quality issues and changes to U.S. fuel economy rules. The company plans to focus on other electrified options such as hybrids and range extended vehicles (CNBC).

Valuation Changes

Fair Value: implied fair value has fallen from €8.65 to €8.06 per share, a reduction of about 6.8%.
Discount Rate: the discount rate is effectively unchanged at 11.6%.
Revenue Growth: projected euro revenue growth has fallen significantly, from 5.40% to 3.68%.
Net Profit Margin: expected net profit margin has risen from 2.89% to 3.30%.
Future P/E: the future P/E multiple has fallen from 7.02x to 5.80x.

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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 €1.87) 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 €8.8 billion in earnings, and the most bearish expecting €3.3 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 5.8x on those 2029 earnings, up from -0.9x today. This future PE is lower than the current PE for the GB Auto industry at 24.4x.
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 €171.1 billion, earnings will come to €5.6 billion, and it would be trading on a PE ratio of 5.8x, assuming you use a discount rate of 11.6%.
Given the current share price of €6.58, the analyst price target of €8.06 is 18.4% 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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