Piper Sandler analyst Alexander Potter downgraded the shares of Stellantis NV (NYSE:STLA) from Overweight to Neutral rating and lowered the price forecast from $23 to $13.
In its latest edition of the “Big Book of Automotive Insights,” published on Thursday, Piper Sandler has made several important ratings adjustments.
According to the analyst, there are numerous challenges for the global automaker, including lower-than-expected margins and lack of leadership. The analyst said that these issues are expected to persist for years.
The downgrade follows Piper Sandler’s reevaluation of Stellantis’ financial position, predicting a 5% adjusted operating margin in 2025.
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The analyst also expressed concerns over the company’s leadership vacuum without a CEO, the ongoing tariff risks, and the pressures posed by its electric vehicle strategy.
While product launches could mitigate market share declines in 2025, the analyst noted that Stellantis’ EV offerings are perceived as too expensive in the U.S., particularly in Europe, and notes EV sales may hurt margins.
Despite these challenges, the analyst acknowledged that a favorable resolution of trade issues could benefit Stellantis more than other automakers.
The investors’ doubt about the DCF value of the automakers like Stellantis is justified, remarked the analyst.
The new reduced price forecast of $13 is based on 4.5x 2026e EPS of €2.75 and USD/EUR of 1.088.
The analyst is cautious in the outlook, citing risks such as volatile material prices, supply chain disruptions, and labor conflicts that could affect future performance.
Price Action: STLA shares traded lower by 3.47% at $12.23 at last check Thursday.
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