Stellantis (STLA) Stock Drops 24% But Analysts See 40% Upside Ahead

TLDR

• Stellantis stock crashed 24% after management cut its dividend, announced $26 billion in write-downs, and warned operating profit would miss guidance for H2 2025
• The automaker is quietly reintroducing diesel versions of at least seven car models across Europe after disappointing EV sales failed to meet expectations
• Operating profits collapsed from $25 billion in 2022-2023 to under $10 billion in 2024, with profits nearly evaporating in 2025
• New CEO Antonio Filosa announced a $13 billion U.S. investment and five new vehicles as part of his turnaround strategy
• Despite the brutal selloff, analysts see value at current prices with shares trading at 0.15 times sales versus Ford and GM at 0.3-0.4 times sales

Stellantis stock took a beating last week. The shares plunged 24% on February 6 after management delivered a brutal update that included a dividend cut and major write-downs. But here’s the thing about market selloffs this ugly—they often create opportunities.

Stellantis N.V., STLA

The Chrysler parent announced $26 billion in one-time charges for EV asset write-downs and warranty issues. Operating profit for the second half of 2025 would miss previous guidance. The dividend got axed for 2026. Oh, and the company sold $5 billion in convertible debt to prop up its balance sheet.

The numbers tell a painful story. Stellantis generated about $25 billion in operating profits during both 2022 and 2023. Those profits dropped to under $10 billion in 2024. By 2025, profits had nearly vanished.

Strategic Shift on Electric Vehicles

But Stellantis is making moves that could change the narrative. The company quietly started reintroducing diesel versions of at least seven car models across Europe in late 2025.

This marks a retreat from the EV-only strategy that hasn’t delivered. The company previously said fully electric cars should make up 100% of European sales and 50% of U.S. sales by 2030. Demand fell short on both sides of the Atlantic.

The diesel comeback includes the Opel Astra, Opel Combo van, Peugeot 308, Peugeot Rifter, and Citroën Berlingo passenger van. The company will also continue producing diesel versions of the DS7 SUV and several Alfa Romeo models.

Diesel vehicles made up just 7.7% of new car sales across Europe in 2025, down from over 50% in 2015. Fully electric cars accounted for 19.5%.

But diesels offer a competitive edge. Chinese EV makers like BYD don’t compete in the diesel segment. BYD sold 188,000 cars in Europe in 2025, up 269% year over year, capturing 1.4% market share. Diesel gives Stellantis a way to fight back.

Path to Recovery

New CEO Antonio Filosa took over in May 2025 after Carlos Tavares departed in December 2024. Filosa announced a $13 billion investment in the U.S. and five new vehicles late last year. He’s betting on Lee Iacocca’s old playbook—product comes first.

Pearson rates shares Overweight with a $10.70 price target, up 40% from the $7.62 close on February 11. His math is straightforward. Stellantis trades at 0.15 times sales while Ford and GM trade at 0.3 and 0.4 times sales respectively.

Stellantis typically trades at 85% of the price-to-sales ratio of Ford and GM. Now it trades at 44%, the lowest in five years. Getting halfway back to that historical ratio would mean a $14 stock price, almost double current levels.

Wolfe Research strategist Chris Senyek points out that dividend cuts often precede stock outperformance over the following one to two years. Essentially, things can’t get much worse.

The company reports full 2025 earnings on February 26. First-quarter results drop in April. An investor day is scheduled for May. Any of these events could provide catalysts.

Americans bought 16.7 million cars in 2025, the best year since 2019. Europeans bought 13.3 million cars, up 3% year over year. S&P Global expects U.S. and European volumes to stay stable in 2026.

North America accounts for roughly 40% of Stellantis revenue and remains largely insulated from Chinese competition. Europe represents just under 40% of sales, with South America contributing about 10%. The company also brought back the Jeep Cherokee and its Hemi V8 engine in the U.S. market.

The post Stellantis (STLA) Stock Drops 24% But Analysts See 40% Upside Ahead appeared first on CoinCentral.