Stellantis plunges to lows, brokers spooked by maxi profit warning

(Il Sole 24 Ore Radiocor) - A nightmarish Friday for the Stellantis stock at Piazza Affari. The group's shares discounted the maxi profit warning announced before the opening of the market, losing 25.17%, slipping to the lowest since the company's inception (closing at EUR 6.11) and placing 77.5% below the highs reached in March 2024 (EUR 27.155). In less than two years, Stellantis has burned through about EUR 61 billion in terms of market capitalisation, of which about EUR 6 billion in this session alone. The group will record a net loss of between 19 and 21 billion in the second half of 2025 after maxi charges of 22.2 billion to reset the business. Also worse than expected was the 2026 guidance as well as the suspension of the dividend due to the results: analysts expected "at least a symbolic coupon to remain".

little use was made of positive glimmers, such as the fact that global consolidated deliveries are seen up 9% to 1.5 million units in the fourth quarter and 11% to 2.8 million in the second half. And the fact that the CEO, Antonio Filosa, pointing the finger at 'past criticalities' and 'an overestimation of the pace of the energy transition', spoke of a necessary evil to relaunch the business and put the group back on a trajectory of growth and greater profitability, explaining that the corrective actions initiated in 2025 are already beginning to bear fruit.

As a result, the share price crashed more than 23% and, after being halted several times for excessive declines, fell as low as EUR 6.3 per share, the lowest level since the company was formed after the merger between Psa and Fca, effective from January 2021. "The figures were worse than expected. Extraordinary charges of €22.2 billion were announced with cash out of €6.5 billion to be spread over four years, higher than our expectations (over €2 billion of cash out) and the consensus," point out Equita analysts, according to whom "estimates for the second half of 2025 and 2026 guidance are also lower than expected".

In detail, net revenues for the second half of the year are expected to be between EUR 78bn and EUR 80bn and AoI between EUR -1.2bn and EUR -1.5bn. A net loss is expected between EUR 19bn and EUR 21bn and cash flow from operating activities between EUR -2.3bn and EUR -2.5bn. Free cash flow from industrial activities is expected to be between -1.4 and -1.6 billion. Taking into account the net loss in 2025, the company will not distribute a dividend in 2026. In addition, the Stellantis Board of Directors authorised the issuance of hybrid perpetual subordinated non-convertible bonds, up to a maximum amount of EUR 5 billion. "Although in light of the recent news we had expected significant write-downs/exceptional charges (product portfolio realignment, supply chain downsizing and restructuring), the magnitude is significantly larger than expected, Intermonte analysts explain, pointing out that '2025 results and 2026 guidance reflect a return to growth on the one hand, but are still heavily impacted by the deep restructuring. Revenues and adjusted Ebit could be around EUR 162 billion and EUR 5 billion respectively.

"Overall, the news is not positive due to the size of the impairment charge, the dividend cut and a 2026 guidance that although recovering shows that the turnaround will take longer," the experts add. Looking ahead, therefore, 'the group is heading for a long road, with significant difficulties to reorganise the business and still no news on capacity reduction,' say Citi analysts, who are especially concerned about the fact that 'the company now expects a new cash burn in 2026, with 2027 still highly uncertain given general industry price trends'. Furthermore, given that the announced charges 'do not include any plant closures, we do not believe the news fully restores Stellantis' cost base, which is probably necessary given the reduction in market share'. According to Citi, therefore, Stellantis' necessary future upturn 'will most likely involve a reduction in production capacity to fully restore operations in North America and Europe'.