Stellantis: Downgrade to Neutral

Research evidence excerpt

Stellantis: Downgrade to Neutral

J P M O R G A N Europe Equity Research

09 July 2026

Stellantis ▼Neutral

Previous: Overweight

Downgrade to Neutral STLAM.MI, STLAM IM

Price (08 Jul 26):€4.70

▼Price Target (Jun-27):€6.00

Prior (Jun-27):€10.00

We downgrade STLA to Neutral (OW) as we think the firm still needs ~14 months European Autos & Auto Parts

ACof work to reap the benefits of purchasing components at a lower price, feeding Jose M Asumendi

through to the product launches coming on stream in FY27/28. Also, in the absence (44-20) 7742-5315

of labor reductions or drastic capacity cuts across Europe and NA, we see limited jose.m.asumendi@jpmorgan.com

chances for STLA to make a rapid return across both regions. In Europe, we believe J.P. Morgan Securities plc

STLA is effectively running the business cash neutral, avoiding large restructuring Specialist Sales contact details:

cash outflows as the firm leverages its capacity across Chinese partners such as

Sam Edmunds - Specialist Sales -Leapmotor and DongFeng. Further earnings downgrades for the firm could be European Industrials

related to additional provisioning for quality, particularly in NA and potentially (44-20) 7742-8733

related to stronger competition in the Brazilian market which we have not factored sam.edmunds@jpmorgan.com

in our earnings estimates. Regarding the balance sheet and cash flow, we forecast Style Exposure

positive free cash flow in FY27, which in our view could support a dividend

payment next year. We would prefer for the firm to rule out any dividend payment

until it has returned to healthy returns in NA and especially in the light of the

upcoming market share competition in Europe.

What has changed for us since the capital markets day? The reality is that Chinese