Last Update 17 Dec 25

Fair value Increased 0.88%

STLAM: U.S. Turnaround Spend And Product Pipeline Will Support Balanced Risk Reward Outlook

Analysts have lifted their price target on Stellantis slightly to about $10 per share, citing a modest upgrade to revenue growth expectations, a richer but still undemanding future earnings multiple, and improving inventory and product cycle dynamics despite a challenging European auto backdrop.

Analyst Commentary

Recent Street research paints a mixed but gradually improving picture for Stellantis, with valuation support emerging even as execution and macro risks remain elevated. Price targets have been nudged higher in both U.S. dollar and euro terms, reflecting modest upgrades to growth and earnings assumptions rather than a wholesale shift in sentiment.

Bullish Takeaways

Bullish analysts see Stellantis as offering attractive value relative to premium European peers, with current multiples not fully reflecting its cash generation potential and improving balance between legacy and electrified portfolios.
Upgrades to Buy and incremental price target increases signal growing confidence that a better U.S. inventory position and a supportive product pipeline can drive sequential earnings improvement into 2025 and beyond.
New model launches are expected to underpin volume and mix, helping Stellantis defend margins and sustain free cash flow even in a slower demand environment.
Some strategists argue that the degree of de-rating across European autos is premature and that, within this group, Stellantis offers a more compelling risk reward profile than its current neutral consensus suggests.

Bearish Takeaways

Bearish analysts remain cautious on the European auto cycle, highlighting competitive pressure from Chinese manufacturers, uncertainty around battery electric vehicle adoption and the potential for price erosion in key segments.
Regulatory and macro headwinds, including tariffs, foreign exchange volatility and tightening emissions rules in the European Union, are seen as ongoing risks to execution and margin stability.
Neutral ratings anchored around the $10 price level reflect concern that earnings recovery may be slower than hoped, with limited room for error in meeting volume and cost reduction targets.
While near term valuation appears undemanding, some expect only modest multiple expansion until Stellantis demonstrates sustained progress on electrification, product cycle delivery and capital allocation discipline.

What's in the News

Stellantis plans to invest about $13 billion over four years to expand its U.S. manufacturing footprint, add more than 5,000 jobs and support five new vehicle launches, lifting annual U.S. production capacity by roughly 50% (Key Developments).
The company is preparing around $10 billion in U.S. turnaround investments, including up to $5 billion in new spending focused on key plants in states such as Illinois and Michigan. This underscores the strategic importance of the U.S. market to future profits (Bloomberg).
Stellantis will lose 50% of its Canadian tariff exemption on U.S.-built vehicles exported to Canada after shifting some production out of Ontario, increasing cross border cost pressure relative to prior arrangements (Bloomberg).
Stellantis may fully exit its Comau industrial automation business, potentially handing control to private equity firm One Equity Partners as it reshapes its asset portfolio ahead of a new long term plan (Bloomberg / Corriere della Sera).
Nissan is in talks with Stellantis about sharing an electrified Rogue based crossover. This highlights ongoing industry consolidation around platform and EV collaboration to manage costs and speed time to market (Automotive News).

Valuation Changes

The fair value estimate has risen slightly to €9.75 per share from €9.66, reflecting a modestly stronger outlook despite ongoing cyclical risks.
The discount rate is unchanged at 11.42%, indicating no shift in the assumed risk profile or cost of capital for Stellantis.
Revenue growth has increased slightly to about 6.01% from 5.91%, suggesting a modestly more optimistic top-line trajectory.
The net profit margin has fallen slightly to about 3.67% from 3.85%, implying a somewhat more conservative view on profitability.
The future P/E multiple has risen moderately to about 6.16x from 5.83x, signaling a somewhat richer, but still low, valuation relative to 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.

Electrification And Global Market Expansion Will Unlock Value