Core Thesis - Stellantis N.V. is experiencing significant fundamental deterioration, indicating more downside potential than upside at current share price levels [1] Financial Performance - The company announced a €22.2 billion write-down and projected a substantial loss for the second half of 2025, admitting that previous earnings were inflated due to a failed electric vehicle strategy [2] - The suspension of the 2026 dividend aims to preserve liquidity, indicating strain on the balance sheet and removing a key support for shareholders [2] Strategic Decisions - Stellantis is reallocating approximately €6.5 billion in cash to terminate contracts and cancel electric vehicle programs, such as the Ram 1500 EV, reflecting strategic missteps that are resulting in cash outflows [3] - The company's aggressive shift towards higher-priced electrified and hybrid models has led to quality issues, including battery failures and recalls, particularly affecting core brands like Jeep and Ram [4] Market Dynamics - Elevated dealer inventories across CDJR networks suggest weak demand for premium trims and EV variants, which are misaligned with the traditional customer base, putting pressure on pricing, margins, and working capital [5] - Increased competition from peers like Toyota and Ford is eroding brand loyalty, raising concerns about the durability of market share [5] Operational Outlook - With earnings resetting lower and leverage likely to rise, Stellantis is entering a prolonged restructuring phase, with halted capital returns and operational execution under scrutiny [6] - The absence of a clear catalyst for margin recovery or demand stabilization suggests a risk profile skewed towards further downside as fundamentals continue to weaken [6]

We came across a bearish thesis on Stellantis N.V. on r/Valueinvesting by tomtim90. In this article, we will summarize the bears’ thesis on STLA. Stellantis N.V.'s share was trading at $7.77 as of February 24th. STLA’s trailing and forward P/E were 3.19 and 6.49 respectively according to Yahoo Finance. S&P Global (SPGI) Enters a Strategic Data Sharing Agreement with Verisk Copyright: zenstock / 123RF Stock Photo Stellantis N.V. engages in the design, engineering, manufacturing, distribution, and sale of ...