Bitcoin price today: falls to 2-week low below $113k ahead of Fed Jackson Hole
On Thursday, Piper Sandler adjusted its stance on Stellantis NV (NYSE:STLA), downgrading the stock from Overweight to Neutral and significantly reducing the price target to $13.00 from the previous $23.00. The stock, currently trading near its 52-week low of $11.40, has seen a significant decline of about 55% over the past year. According to InvestingPro analysis, the company trades at a modest P/E ratio of 6.2x, suggesting potential value opportunity despite the firm’s analyst citing a reassessment of the automaker’s financial outlook and operational challenges as the primary reasons for the downgrade.
Stellantis, a major player in the global automotive industry, has been navigating through a period of uncertainty, which has been reflected in its operating margins. Recent InvestingPro data shows the company’s gross profit margin at 13.31% and a concerning revenue decline of 17.23% in the last twelve months. The analyst acknowledged a previous overestimation of Stellantis’ financial performance, stating, "When we initiated with an Overweight rating, we knew we were playing with fire." The expectation for the company’s adjusted operating margin in 2025 has now been set at 5%, a figure that is not guaranteed and could potentially take years to achieve due to the company’s complex global operations.
Adding to the company’s challenges is the current lack of a CEO and the need to manage higher tariff risks compared to its competitors, General Motors (NYSE:GM) and Ford. The analyst also noted that while Stellantis’ upcoming product launches might stabilize its market share by 2025, the pricing of its U.S. electric vehicles (EVs) could be too high, and in Europe, the shift toward EV sales may impact margins negatively.
Despite the negative outlook, the analyst pointed out that a trade resolution could be more beneficial for Stellantis than for other automakers. Additionally, the lowered expectations for the company’s financial performance have set a lower bar for future evaluations.
The revised price target of $13 is now based on a price-to-earnings (P/E) valuation method, using a multiple of 4.5 times the estimated 2026 earnings per share (EPS) of €2.75, with a USD/EUR exchange rate of 1.088. This shift from a discounted cash flow (DCF) to a P/E-based valuation reflects investor skepticism regarding the DCF terminal value for automakers like Stellantis, as per the analyst’s comments. Notably, InvestingPro’s Fair Value analysis suggests the stock is currently undervalued, while offering an attractive dividend yield of 9.87%. For deeper insights into Stellantis’s valuation and 14 additional ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Stellantis has reported that tariffs imposed on imports from Canada and Mexico are adversely affecting its Jeep and Ram brands, creating a competitive disadvantage against European and Asian automakers. The company is seeking exemptions for vehicles produced in North America under the United States-Mexico-Canada Agreement to alleviate these financial burdens. Meanwhile, Citi analysts have adjusted their outlook on Stellantis, reducing the stock price target to €12.00, while maintaining a neutral rating. The analysts cite potential earnings improvement in the second half of 2024 but express concerns about pricing pressures and operating income margins.
Stellantis has also introduced STLA AutoDrive, a new automated driving system offering hands-free and eyes-off functionality, enhancing the driving experience by managing routine tasks. This system is part of Stellantis’ strategy to become a carbon net-zero mobility tech company by 2038. Additionally, the Chrysler Pacifica and Jeep Wagoneer L have been recognized in the U.S. News & World Report 2025 Best Cars for Families awards for their safety, reliability, and family-friendly features. These developments reflect Stellantis’ ongoing efforts to innovate and adapt to the evolving automotive market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.