STLA - Stellantis: The Bull Run Is On Pause Not Canceled

2024-06-16 02:26:45 ET

Summary

• Stellantis shares have struggled in 2024, with a negative 6% return compared to a 10% gain for the S&P 500.
• Declining shipments, soft demand, and intensifying competition have contributed to weaker financial results and eroded investor confidence.
• However, Stellantis is strategically positioned for a strong recovery in the second half of 2024, with a planned product offensive and focused cost management.
• Projecting an 11% operating income margin should be reasonable for Stellantis FY 2024 results, suggesting about $23 billion in EBIT on a $209 billion top line (flat YoY).

I have been bullish on Stellantis (STLA) for about two years now, riding the stock from $14 per share to approximately $22 per share, a gain of 76% (including dividends), while the S&P 500 returned "only" about 33%. In 2024 YTD, however, Stellantis shares struggled to match the performance of the broader U.S. equity markets, with a negative 6% return, compared to a 10% gain for the S&P 500 (SP500)....

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