Does Stellantis’ Recent 20% Share Price Slide Reveal a Long Term Opportunity?

• If you are wondering whether Stellantis is quietly turning into a bargain hiding in plain sight, this article is for you. It is aimed at investors trying to work out whether the current share price really reflects its long term potential or just short term jitters.
• Despite being down 20.4% year to date and 18.1% over the last year, the stock has shown some resilience recently, slipping 3.6% over the past week but still up 8.8% across the last 30 days.
• Recent headlines have focused on Stellantis doubling down on its electric and hybrid lineup while pushing cost cutting and efficiency measures across its global brands, all against a backdrop of a cooling auto market. At the same time, investors are watching how the company navigates shifting regulations in Europe and ongoing competitive pressure in both EVs and traditional combustion models.
• On our scorecard Stellantis records a solid 5/6 valuation score, suggesting it appears undervalued on most of the key metrics we track. Next we will break down the main valuation approaches, before finishing with a more complete way to think about what the stock is really worth in context.

Stellantis delivered -18.1% returns over the last year. See how this stacks up to the rest of the Auto industry.

Approach 1: Stellantis Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and discounting those cash flows back into today’s euros. For Stellantis, this two stage Free Cash Flow to Equity model starts from a weak base, with last twelve month free cash flow of about €10.9 billion in the red, reflecting heavy investment and a tough operating backdrop.

Analysts expect this picture to improve meaningfully, with forecasts stepping up to positive free cash flow over the coming years and Simply Wall St extrapolating those estimates further out. By 2029, free cash flow is projected to reach roughly €5.8 billion, and the model continues to grow and discount these flows over the following decade to capture Stellantis’ longer term earning power.

When all future cash flows are added and divided by the number of shares, the DCF model points to an intrinsic value of about €23.17 per share. Compared with the current market price, that implies Stellantis trades at roughly a 56.7% discount. This indicates that, based on this model, the market may be underestimating its long term cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Stellantis is undervalued by 56.7%. Track this in your watchlist or portfolio, or discover 907 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Stellantis.

Approach 2: Stellantis Price vs Sales

For a cyclical and capital intensive business like Stellantis, the Price to Sales ratio is a useful way to cut through earnings volatility and focus on what investors are paying for each euro of revenue. In general, companies with stronger growth prospects and lower perceived risk can justify a higher sales multiple, while slower growth or higher uncertainty should translate into a lower, more conservative ratio.

Stellantis currently trades on a Price to Sales ratio of about 0.20x, which is far below both the Auto industry average of roughly 0.85x and the broader peer group average of around 2.42x. Simply Wall St’s proprietary Fair Ratio for Stellantis, at about 0.43x, estimates what a reasonable Price to Sales multiple should be after factoring in its growth outlook, profit margins, risk profile, industry, and market capitalization. This tailored yardstick is more informative than a straight comparison with peers or the sector because it adjusts for the company’s specific fundamentals rather than assuming all automakers deserve the same multiple. With the current 0.20x sitting well below the 0.43x Fair Ratio, the stock appears attractively priced on this metric.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1448 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Stellantis Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework where you spell out your story for Stellantis, translate that story into assumptions about future revenue, earnings and margins, and then connect those forecasts to a fair value that you can easily compare to today’s share price. Narratives on Simply Wall St’s Community page, used by millions of investors, make this process accessible by guiding you to link what you believe about Stellantis’ electrification strategy, U.S. turnaround plans and restructuring efforts directly into a dynamic valuation that updates when new earnings, news or regulatory changes arrive. For example, one bullish Stellantis Narrative might assume earnings reaching the higher end of analyst expectations with a fair value closer to €14.00, while a more cautious Narrative could anchor on the lower end of forecasts and a fair value nearer €6.00. By setting up your own view alongside others you can quickly see whether your chosen fair value suggests a stance of buy, hold or sell relative to the current price.

Do you think there's more to the story for Stellantis? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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