Citi research remains sidelined on Detroit automaker, Stellantis (NYSE:STLA) with a 12-month price target of $18.00 as the Jeep-parent continues to lose market share, even in its four core models.
STLA's market share has experienced a decline, dropping from 13% to 9% in the US market and decreasing from 21.7% in Q1 2021 to 15% in Q4 2023 in Europe. The French market share for the Group has also fallen from over 35% in 2020 to just over 25% in Q4 2023, based on CCFA data.
Despite emphasizing the significance of the RAM Pickup, JEEP Grand Cherokee, JEEP Wrangler, and Chrysler Pacifica in US volumes, STLA has reduced its share of smaller volume models (assumed to have lower EBIT margin) from 7% to under 4% recently.
Additionally, the big four models have also seen a decline in market share from 8% in late 2021 to under 6%. Even the core RAM pickup, constituting 30% of STLA US sales, has experienced a drop in its share from 4% to 3%, falling below both the GM Silverado and the Ford F150.
In January, STLA's US sales were only 4,000 units ahead of Honda, with 97,000 units compared to Honda's 93,000 units.
“We continue to be positive on STLA FY23 execution, but remain more cautious on FY24E,” Citi analysts wrote in a note.
STLA will release its FY23 results on Thursday, February 15th. Citi analysts expect the automaker to report an adjusted EBIT of €23.8 billion for the fiscal year, with an adjusted EBIT margin of 12.5%. Specifically, the second half of FY23 is expected to have an EBIT of €9.7 billion and a 10.6% adjusted EBIT margin, following a 14.4% adjusted EBIT margin in the first half of FY23. In comparison, the first half of FY22 had a 14.1% adjusted EBIT margin, followed by a 12.0% adjusted EBIT margin in the second half.
Shares of STLA are down 2.14% in afternoon trading on Monday.