Stellantis Integration Will Reinforce 26% Domestic Market Leadership In Turkey

Key Takeaways

• Integration with Stellantis and a broadened product portfolio strengthens domestic leadership, expanding technology access and export opportunities while enhancing revenue and margin stability.
  
• Investments in new models, electric vehicles, and a multi-brand dealer network position Tofas to capture evolving consumer demand and regulatory trends, supporting sustainable growth.
  
• Overdependence on Turkey's market, slow EV transition, reliance on Stellantis, and competitive pressures threaten Tofas's revenue stability, growth, and margins.

Catalysts

Manufactures and sells passenger cars and light commercial vehicles in Turkey.

• The recent acquisition and integration of Stellantis Turkey positioned Tofas as the domestic market leader with a 26% light vehicle market share, giving it access to new product platforms, broader technology, and export opportunities. These scale benefits and portfolio diversity are poised to drive higher future revenues and support margin stability as Stellantis synergies are realized.
  
• Tofas is investing heavily in new models, including a EUR 256 million project with 150,000-unit annual production capacity launching in 2026/2027, and ramping up K0 LCV variants-these moves anticipate growing consumer demand in Turkey and adjacent markets, providing clear pathways to increased plant utilization and higher revenue growth.
  
• Management's long-term targets call for PBT margins increasing to 5–7% by 2028 (from current 2%), with uplift driven by higher factory capacity utilization, improved production mix favoring locally manufactured vehicles, and cost/revenue synergies from the Stellantis integration-directly improving long-term earnings and net margins.
  
• Significant growth in the penetration of electric vehicles (EVs) in Turkey, alongside Tofas' expanding local EV offerings (notably, the rapid rise in BEV sales for the Peugeot brand), aligns the company with favorable regulatory and demand trends towards sustainability, which should support future revenue and margin growth as EV adoption accelerates.
  
• Tofas' extensive dealer and service network, diversified by brand (Fiat, Peugeot, Citroen, Opel), positions it to capitalize on both the rising middle-class/urbanization trend and the increased consumer demand for connectivity and smart vehicle features, likely supporting higher average selling prices and a resilient, diversified revenue base.

Tofas Türk Otomobil Fabrikasi Anonim Sirketi Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Tofas Türk Otomobil Fabrikasi Anonim Sirketi's revenue will grow by 71.0% annually over the next 3 years.
• Analysts assume that profit margins will increase from 1.1% today to 4.9% in 3 years time.
• Analysts expect earnings to reach TRY 26.1 billion (and earnings per share of TRY 59.75) by about July 2028, up from TRY 1.2 billion today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 17.4x on those 2028 earnings, down from 94.0x today. This future PE is lower than the current PE for the TR Auto industry at 49.2x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 39.98%, as per the Simply Wall St company report.

Tofas Türk Otomobil Fabrikasi Anonim Sirketi Future Earnings Per Share Growth

Risks

• Declining export volumes and heavy reliance on Turkey's domestic auto market expose Tofas to macroeconomic volatility and currency risk, potentially resulting in unpredictable revenues and earnings instability.
  
• The company's ability to ramp up or replace aging passenger car models (e.g., Egea/Tipo phaseout) is uncertain and could lead to product gaps, reducing competitiveness in both domestic and export markets and impacting future revenue streams.
  
• Ongoing shift towards electric vehicles (EVs) may outpace Tofas's adaptation-current product launches and plans appear centered on internal combustion engine vehicles with insufficient emphasis on EVs, which could erode market share and compress margins as the market transitions.
  
• Heavy dependence on the Stellantis partnership for technology, new model development, and product platforms poses strategic risk-any deterioration in this partnership could reduce access to vital R&D and innovation capacity, threatening long-term growth and profitability.
  
• Intensifying global competition from established automakers and disruptive EV entrants, combined with potential supply chain disruptions for critical components, could increase costs, constrain production capability, and depress EBITDA margins and net earnings.

Valuation

• The analysts have a consensus price target of TRY331.324 for Tofas Türk Otomobil Fabrikasi Anonim Sirketi 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 TRY546.0, and the most bearish reporting a price target of just TRY220.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be TRY536.7 billion, earnings will come to TRY26.1 billion, and it would be trading on a PE ratio of 17.4x, assuming you use a discount rate of 40.0%.
  
• Given the current share price of TRY226.7, the analyst price target of TRY331.32 is 31.6% 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.