Stellantis Shares in the Doldrums: Is the Auto Giant a Bargain After a Steep Slide?
MILAN – Shares of Stellantis NV (BIT: STLAM), the automotive behemoth behind brands like Jeep, Ram, and Peugeot, have been stuck in a prolonged slump, raising questions among investors about whether the stock has finally reached bargain territory.
The company's stock recently closed at €8.41, reflecting a stark 26% decline over the past year and a nearly 30% drop over three years. This performance lags significantly behind broader auto industry sentiment, which has been buoyed by the electric vehicle transition, despite recent headwinds.
Valuation Metrics Flash Green
Analysts applying a Discounted Cash Flow (DCF) model—a fundamental valuation method that projects future cash generation—estimate Stellantis's intrinsic value could be around €28.37 per share. This implies the current market price represents a staggering discount of approximately 70%.
"When a blue-chip company trades at such a deep discount to its estimated cash flow value, it demands attention," said market analyst David Chen. "The disconnect between price and model value is pronounced, though it heavily relies on the accuracy of long-term forecasts."
Further supporting the undervaluation thesis, Stellantis trades at a Price-to-Sales (P/S) ratio of just 0.17x. This is not only below the auto industry average of 0.81x but also significantly under the peer group average of 2.27x. A fair value analysis suggests a more appropriate P/S ratio for the company could be 0.47x, based on its growth profile, margins, and risk.
Navigating a Complex Landscape
The backdrop for Stellantis is a mixed bag. The company faces the capital-intensive shift to electrification, supply chain uncertainties, and fluctuating demand in key markets like Europe and China. However, it also boasts strong profitability in North America, a robust portfolio of iconic brands, and aggressive cost-saving targets from its merger legacy.
"The market is punishing Stellantis for its exposure to regions with slower EV adoption and potential trade tensions," commented portfolio manager Sarah Wilkinson. "But it's ignoring the sheer cash-generating power of its truck and SUV business and its improving margin profile. This looks like classic cyclical pessimism."
Investor Sentiment: A Divided View
On financial platforms, investor narratives around Stellantis vary widely. Some models use conservative assumptions, projecting modest growth to arrive at a lower fair value. Others are more bullish, factoring in successful electrification and market share gains to justify a higher valuation. This divergence highlights the uncertainty and opportunity inherent in the stock.
Community Voices
Michael R., a long-term investor: "I've been adding to my position on this weakness. The dividend yield is becoming attractive, and the company is fundamentally sound. The market is myopic."
Lisa T., a retail trader: "The charts are horrible. Until it breaks above the 200-day moving average, it's a value trap. The entire European auto sector is uninvestable right now with the China risk."
Robert G., an industry analyst (sharper tone): "This 'undervalued' narrative is a tired excuse for poor performance. Management has failed to articulate a compelling EV vision that resonates. A low P/S ratio isn't a trophy; it's a symptom of the market's complete lack of faith in their future growth. Show me the plan, then we'll talk about value."
Disclaimer: This analysis is based on publicly available data and valuation models. It is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a financial advisor.