piove sul bagnato x Stellantis
- Morgan Stanley downgraded Stellantis NV (NYSE:STLA) to Underweight from Equalweight on Monday and set a price target of EUR4.50. The stock currently trades at $5.31, hovering just above its 52-week low of $5.05, with shares down over 50% year-to-date. Despite the bearish analyst call, InvestingPro data suggests the stock may be undervalued at current levels, placing it among names on the platform’s Most Undervalued list.
The firm raised its 2026-27 estimates for European automakers for the first time since April 2024, now slightly above consensus. Morgan Stanley said the cyclical margin bottom appears to be behind the sector, driven by self-help initiatives and large write-offs following last year’s CEO changes.
The ongoing earnings recovery has not yet been reflected in European automakers’ absolute and relative performance, breaking the clear historical correlation with earnings. Valuation looks supportive, with all European automakers trading below liquidation value and delivering 7% yield to shareholders. Stellantis trades at just 0.22 times book value, though InvestingPro assigns the company a "WEAK" financial health score. For investors seeking deeper insights, InvestingPro offers 11 additional ProTips for Stellantis, plus comprehensive Pro Research Reports available for over 1,400 US equities.
Morgan Stanley expects the margin recovery to continue but at absolute depressed levels, far below previous cycles and below long-term consensus expectations. Chinese competition limits European automakers’ capacity to reduce investments, affecting returns and free cash flow metrics where consensus still looks too optimistic.
The European auto market should continue to recover, but Morgan Stanley said European automakers should continue to lose share to Chinese automakers in a weak global market. Companies may announce new joint ventures with China peers, asset disposals and diversification out of autos, factors that could potentially generate short-term rallies.
