Jeep maker Stellantis disappoints investors as charges, supply risks cloud outlook

Core Viewpoint - Stellantis has warned of upcoming charges related to regulatory changes, strategic shifts, and product plans, leading to a decline in its share price by up to 6.5% [1][3] Financial Performance - The company reported a 13% increase in third-quarter revenue, marking its first top-line growth after seven quarters, and reiterated forecasts for higher revenue, improved cash flow, and low-single digit margins in the second half [2] - Stellantis expects to incur one-off charges in the second half due to changes in strategic and product plans, including a shift back to hybrids and warranty extensions for flawed products [2][3] Strategic Actions - New CEO Antonio Filosa emphasized decisive actions to align resources and plans for long-term growth, including a $13 billion investment in the U.S. [3][6] - The company is facing challenges in the U.S. market, with declining sales and high inventories, prompting a turnaround strategy [6] Market Impact - Shares of Stellantis fell by 5% shortly after the announcement, reflecting investor concerns over vague guidance and potential impacts on free cash flows [3][4] - The company has factored in additional charges into its second-half guidance, assuming no disruptions in supply chains, despite ongoing semiconductor shortages [4] Future Outlook - Stellantis estimates a €1 billion ($1.2 billion) impact from current U.S. trade policies in 2025, at the lower end of its previous forecast [7] - The company is refocusing on hybrid and petrol vehicles after a previous emphasis on electrification, alongside plans to reintroduce popular models like the Jeep Cherokee SUV [7]