Automotive giant Stellantis, the parent company behind iconic brands such as Jeep, Dodge, Fiat, Chrysler, Ram, and Peugeot, is projected to maintain its current trajectory of underperformance. This outlook comes from investment banking powerhouse JPMorgan, which has revised its rating on the manufacturer's stock from "overweight" to "neutral."
According to JPMorgan analyst Jose Asumendi, the company's ambitious turnaround initiatives require substantial time to translate into tangible market share gains. "We think the firm still needs ~14 months of work to reap the benefits of purchasing components at a lower price, feeding through to the product launches coming on stream in FY27/28," Asumendi explained in a recent client note. He further emphasized that the core investment thesis for Stellantis (STLA) hinges on a successful revitalization of its North American operations. These crucial regional activities have been significantly hampered by inventory reduction strategies and strategic vehicle price adjustments.
For Stellantis to accelerate its path to recovery and see improvements materialize more swiftly, Asumendi suggested the company would need to implement considerable reductions in its workforce and manufacturing capacity across both its European and North American divisions. Looking ahead, JPMorgan anticipates a "relatively slow second quarter," projecting that both key regions will continue to operate near break-even margins. A more substantial progression in earnings is not expected until the fiscal years 2027 and 2028.
This cautious assessment from JPMorgan aligns broadly with the sentiment across Wall Street. Data from LSEG indicates that among the 12 analysts covering Stellantis, five currently recommend a "hold" rating, four advise a "buy" or "strong buy," and three maintain an "underperform" rating on the stock. Reflecting these challenges, Stellantis shares have already seen a significant decline, dropping 50% year-to-date.
