Stellantis
Note: This is a daily stock update and the information stands true as of 19/09/24, 09:00 CEST.
Company Update:
We have cut our EPS quite significantly by 22% in 2024 and 20% in 2025.
FY24 sales estimate were cut by 9%, primarily in Europe and North America, and we lowered our FY24 EBIT estimate by 23%, bringing the adjusted operating margin to 9.6% (previously 11.2%), just below Stellantis' double-digit target. With the group needing to reduce inventory, price discounts are expected to weigh on margins as well as the higher fixed cost base from the new product offensive.
We expect these challenges in the US and Europe to persist into FY25. Consequently, we have adjusted our FY25 sales estimate down by 8% and lowered FY25 EBIT by 20%, bringing the adjusted operating margin to 10% (previously 11.4%).
These cuts and drop in peers had a sharp impact on our valuation metrics and we have cut our TP by 25% to €20.4 vs €26.8 previously.
Our DCF was reduced by 30%.
Expert Opinion:
Despite these cuts in EPS, we maintain a positive rating on the name due to the cheap valuation. However, I do not see any reason to buy the name just yet. Recent data from the European sales in August show that the situation keeps worsening with deliveries falling 16.5%. The drop in BEV stands at 36% in Europe (69% drop in Germany, 41% in Italy and 33% drop in France).
For daily updates, subscribe to our newsletter and for detailed daily updates, reach our to us at sales@alphavalue.eu
Company Update:
We have cut our EPS quite significantly by 22% in 2024 and 20% in 2025.
FY24 sales estimate were cut by 9%, primarily in Europe and North America, and we lowered our FY24 EBIT estimate by 23%, bringing the adjusted operating margin to 9.6% (previously 11.2%), just below Stellantis' double-digit target. With the group needing to reduce inventory, price discounts are expected to weigh on margins as well as the higher fixed cost base from the new product offensive.
We expect these challenges in the US and Europe to persist into FY25. Consequently, we have adjusted our FY25 sales estimate down by 8% and lowered FY25 EBIT by 20%, bringing the adjusted operating margin to 10% (previously 11.4%).
These cuts and drop in peers had a sharp impact on our valuation metrics and we have cut our TP by 25% to €20.4 vs €26.8 previously.
Our DCF was reduced by 30%.
Expert Opinion:
Despite these cuts in EPS, we maintain a positive rating on the name due to the cheap valuation. However, I do not see any reason to buy the name just yet. Recent data from the European sales in August show that the situation keeps worsening with deliveries falling 16.5%. The drop in BEV stands at 36% in Europe (69% drop in Germany, 41% in Italy and 33% drop in France).
For daily updates, subscribe to our newsletter and for detailed daily updates, reach our to us at sales@alphavalue.eu
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Alphavalue Morning Market Tip
Solid start of 2025 with signs of recovery in key markets.