I know Stellantis is one of the most hated names, especially on Reddit. But I think around €3.9-€4 a share, this is really hard to ignore.
Stellantis had a decent first half of 2026, with AOI margin recovered to low single digits, full-year guidance reaffirmed, and positive industrial FCF expected in 2027.
Their FaSTLAne targets an ambitious 7% AOI margin by 2030. However, modelling a reverse DCF with current price implies only around half of that target achieved in 2030. Even a DCF based on analysts' consensus AOI margins: 2.8% in 2027 and 3.8% in 2028 (flat to 2030), yields a €6.10 fair value.
North America is leading the recovery with the return of HEMI V8 in Ram, which has been incredibly successful (+29% in Q3). Jeep, though, has been the weak side as sales fell 20% in Q3, its dealers now sitting on inventory. So, Q3 sales came out flat overall.
Quality is still a problem after years of neglect. There have been numerous recalls this year, alongside production halts in Europe and Canada. But, I think, fixing Stellantis' quality issue would likely take more than half a year. Management has also flagged Q4 as the stronger quarter, as their cost-savings program starts to come through.
In the near term, they are still struggling with demand, quality, and trust, as investor, customer, and dealer sentiment is incredibly low with Stellantis, and rightly so. But so far, the trajectory has been right. Filosa has not put a foot wrong yet, and he has precisely the right mindset to focus on North America, its most profitable region.
In the long term, I am actually quite optimistic, especially if margin holds at low single digits in the near term.
*I think buying a Stellantis share instead of your lunch sandwich might just be a good idea.*
*What do you think?*
My full analysis: [https://economiyaki.substack.com/p/stellantis-recovery-in-question](https://economiyaki.substack.com/p/stellantis-recovery-in-question)
