Stellantis outlook revised to negative by S&P on profitability concerns

Published 08/08/2025, 20:40
© Reuters.

Investing.com -- S&P Global Ratings revised its outlook on Stellantis (NYSE:STLA) to negative from stable on Friday, while affirming its ’BBB/A-2’ ratings for the automaker.

The rating agency cited challenges in Stellantis’ efforts to restore profitability in North America, where the company reported an adjusted operating margin of minus 3.4% in the first half of 2025, following minus 6.8% in the second half of 2024.

S&P noted that Stellantis cut prices on selected U.S. models in the second half of 2024 and increased incentives, which were higher than market averages in June 2025. These measures helped correct excess inventory, bringing dealer inventory to about 68 days at the end of June 2025, up from 63 days at the end of December 2024, and significantly below the more than 90 days recorded in June 2024.

The automaker’s U.S. market share stood at approximately 7% in the second quarter of 2025, down from 8.2% in 2024 and 13.0% in 2019. In 2024, Stellantis lost its fifth-place position in the U.S. market to Honda (NYSE:HMC).

S&P indicated that Stellantis’ recovery in North America depends heavily on the success of upcoming model launches, including the Jeep Cherokee and Compass, as well as the combustion engine version of the Dodge Charger later this year.

In Europe, Stellantis faces similar challenges, with its adjusted operating margin falling to zero percent in the first half of 2025, compared to 1.2% in the second half of 2024 and 6.9% in the first half of 2024. S&P observed discounts exceeding 10% on many vehicles across Stellantis brands, reflecting intensified competition.

The rating agency also highlighted the impact of U.S. import tariffs, projecting a hit of about €1.5 billion to Stellantis’ EBITDA in 2025 and approximately €1.8 billion in 2026 after mitigating actions.

S&P could downgrade Stellantis in the next 12-18 months if the company fails to significantly improve its operating performance in 2026, with prospects of sustainably achieving an adjusted EBITDA margin above 8% and free operating cash flow to sales of about 3% in 2027.

The outlook could return to stable if successful model launches and improved management of pricing, inventory, and mix enable Stellantis to restore its financial metrics, supported by market shares above 7% in North America and above 15% in Europe.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.