Stellantis Stock Still Stands to Stump the Skeptics


  • Stellantis’ (STLA) management has built a powerhouse out of three once-floundering automakers.
  • Even as auto demand slows down, the Chrysler, Fiat, and Peugeot parent appears well-positioned to weather it.
  • Consider buying Stellantis stock for value, growth, and yield.
Stellantis stock - Stellantis Stock Still Stands to Stump the Skeptics

Source: Antonello Marangi /

Stellantis (NYSE:STLA) has been a victorious underdog. Formed when Fiat Chrysler merged with Peugeot in 2021, its formation represented the union of several “also-ran” contenders in the automotive space. However, Stellantis stock has proven its critics wrong, and in a big way.

Since the deal close, shares in this Dutch-domiciled entity, whose main vehicle brands in the U.S. are Jeep, Ram, and Dodge, have performed well. At one point, shares were up 100% from where they were when the megamerger closed. Yes, strong post-pandemic vehicle demand played a role in this, but that’s been the only factor.

Stellantis’ focus on the bottom line and on growth has played a role as well. This bodes well for the future, both for the company riding out possible rocky conditions in the near-term and for continuing to be a winner among automotive stocks.

Stellantis Stock: A Banner Year in 2023, but is Trouble Ahead?

STLA has performed strongly over a multiyear time frame, but the bulk of these gains took shape in 2023. Interestingly enough, last year was not a banner one for this automaker’s total sales. In fact, while rivals reported increased volumes in 2023, Stellantis reported both lower volumes and lower market share.

However, one can say that the company more than made up for it, based on its latest full-year fiscal results. In 2023, sales went up 6%, with net earnings going up by 11%.

This continued strong fiscal performance, coupled with further news on the company’s EV endeavors, has led to an outsized move higher for STLA.

Over the past year, shares have rallied more than 53.5%. However, STLA has pulled back, due to some less-than-stellar news. For Q1 2024, the company reported continued volume declines, especially for its Ram and Dodge brands. At first glance, this may seem like a sign of trouble emerging.

After all, cost cutting and focusing on pricier vehicle models can only go so far. Still, even if Q1 fiscal results reveal lower revenue and earnings as well, don’t assume that means the end of the road for STLA.

Why Downside Risk May be Minimal

With its high double-digit move higher over the past twelve months, STLA has outperformed its incumbent auto stock peers, in particular “Detroit Three” rivals like Ford (NYSE:F) and General Motors (NYSE:GM).

Given both Stellantis’ weak Q1 vehicle volume numbers, plus downbeat forecasts for 2024 new car demand, the skeptics may expect an outsized decline for this stock relative to peers.

However, downside risk for STLA from this industry rough patch may be smaller than the bears anticipate. Namely, because an industry downturn may be also baked into the stock’s valuation.

At current prices, Stellantis trades for four times forward earnings. For comparison, GM trades for nearly five times earnings, and Ford trades for over six times earnings. Not only that, the STLA forward multiple is based on sell-side consensus, which already calls for earnings to fall compared to 2023, from $6.56 to $6.18 per share.

Given management’s cost discipline, additional sales declines may not necessarily lead to a big earnings drop. Analysts like Piper Sandler’s Alexander Potter remain bullish that the company’s above-average margins will persist. Although consensus also calls for STLA’s earnings to drop again in 2025, it’s not set in stone this happens.

Bottom Line: Still a Strong Choice for Value, Yield, and Growth

Later this year, sales trends for Stellantis could improve. That’s when the company releases its much-anticipated Jeep Wagoneer S electric SUV. The automaker is also gearing up for the launch of a new gas-powered vehicle model, the Ram 1500 RHO. Success with this vehicle could also help shore up results a few quarters from now.

Considering these vehicle launches, plus Stellantis’ further pivot toward EVs, the automaker may stay a winner in 2025 and beyond.

Hence, alongside good value, STLA also offers growth potential. Keep in mind, too, that this is also a high-yield stock. Shares sport a forward yield of 6.67% at current prices.

Shares could soon sink, following the release of fiscal results on today. However, a post-earnings decline for Stellantis stock may prove short-lived. Consider this a great choice among auto stocks, even in the face of potential weakness.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Thomas Niel, contributor for, has been writing single-stock analysis for web-based publications since 2016.

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