French conglomerate, Stellantis NV, is a company that designs, manufactures, distributes, and sells vehicles. Its most recognisable brands include Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Jeep, Opel, and Vauxhall. Of course, there’s the iconic Peugeot too.
Stellanis operates through the Africa, Asia Pacific, China, India, Enlarged Europe, Middle East, North America, and South America segments. With operations headquartered in the Netherlands, this is one company with a true global footprint.
Current market cap for Stellanis NV is a handsome $46.5 billion.
An Expert Look at Stellantis Stock
The current consensus derived from polling 25 investment analysts is buy stock in Stellantis NV. This rating has barely budged since March 2022, when it was changed from a “Buy” rating.
Regarding its stock price forecast, 21 analysts offering 12-month price forecasts for Stellantis NV arrive at a median target of $25.56, with a low estimate of $19.59 and a high estimate of $37.75.
Per the CNN Business website, the median stock price estimate represents a +72.08 per cent increase from the last price of $14.86.
Stellantis NV is an undervalued Auto Stock
As of Q4 2021, STLA had performed quite well, improving by as much as 25 per cent before a slight pull-back due to macroeconomic downtrends.
While other big-name auto companies ran up premium valuations, STLA was left in their wake despite delivering consistently strong numbers. For a company that’s placing a premium on decarbonization, they’ve shown a strong hand by offering 29 electrified models to consumers. That’s a good sign for the future, but in spite of its inroads into the electric vehicle arena, P/E ratio is only half of its competitors’.
You can leverage this investment window as revenue growth from the previous year’s merger continues to evolve.
Is Stellantis NV Stock Worth Buying?
The latest earnings per share for Stellantis stock is $1.15, with overall annual growth at -0.50 per cent.
At the current price, Stellantis NV’s valuation could offer a potential significant upside considering comparisons to peers and Wall Street analysts. Yet, it could offer as low as a 10 per cent downside if support manages to fend off macroeconomic headwinds.
All of this means you can buy a juicy stock in the automotive industry with the potential for more EV exposure. The wide-ranging diversification with Maserati-like premium brands to compact lines such as Fiat makes STLA an investor’s delight.
So, how about risks? Stellantis currently has debt in the region of $37 billion. About three-quarters of that is long-term debt. This scenario may not present a significant issue in the future, though. This is because the company has approximately $50 billion of cash in hand.
Historical data on Stellantis’ stock makes it clear there’s strong support around $17. Therefore, there’s as much as 10 per cent downside risk unless further incidental macroeconomic headwinds such as supply chain issues prevail.
So, deal or no deal for Stellantis stock? We recommend a strong “Buy.” There’s still little going for this famed automotive trailblazer. With heavy diversification in Europe, Latin America, and the US, there are plenty opportunities for growth.
Consumers’ leading choice brands such as Dodge and Jeep look set to support stock while growth from new EVs like the electrified Grand Cherokee drive growth.
Stellantis is expected to grow at a healthy 10 per cent year-on-year. It’s a tad slower than their competitors which explains the discounted valuation, however. This metric is essential during earnings as it may actually be a conservative metric in the event that the company’s electric vehicle sales ramp up quickly with potential for future tax incentives.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only