Stalled, Not Scrapped

Stellantis $STLA ( ▼ 1.9% ) shares plunged following a sweeping management update that included a dividend cut and weaker second-half 2025 operating profit guidance.

The company also disclosed €22 billion in one-time charges tied to EV asset write-downs and warranty items, and sold €5 billion in convertible debt to strengthen its balance sheet.

Wolfe Research analyst Emmanuel Rosner upgraded the stock to Peer Perform from Underperform, arguing the bar has now been reset lower.

Stellantis once generated about $25 billion in annual operating profit in both 2022 and 2023, with margins approaching 13%. By 2024, operating profit fell below $10 billion. Profits nearly evaporated in 2025.

New CEO Antonio Filosa is tasked with reversing the slide. His plan includes a $13 billion US investment and five new vehicles aimed at rebuilding market share.

Wolfe’s Chris Senyek notes that dividend cuts often precede stock outperformance over the following one to two years, as expectations get washed out.

At roughly 0.15x sales, Stellantis trades at a steep discount to rival Detroit automakers Ford $F ( ▲ 1.95% ) and General Motors $GM ( ▲ 1.44% ), which trade near 0.3x and 0.4x sales, respectively.

Historically, Stellantis has traded at about 85% of the price-to-sales ratio of those peers. Today, that figure sits closer to 44%, the lowest level in five years.

Chinese competition in Europe remains a risk, but North America still accounts for about 40% of revenue and remains insulated for now.

Execution is the story. Expectations are low. That combination can be powerful fuel.