Stellantis Rating Cut to Equalweight, Price Target Raised to €9.20 on Strategy Concerns
Morgan Stanley cut Stellantis’ rating from Overweight to Equalweight but lifted its price target to €9.20 from €8.50, highlighting underinvestment and weaker market share, margins, free cash flow and leverage versus peers. A $65 billion reversal in EV ambitions across the auto sector underscores demand and valuation pressures for Stellantis.
1. Morgan Stanley Downgrades Rating
Morgan Stanley lowered Stellantis’s equity rating from Overweight to Equalweight on February 3, signaling reduced conviction in the company’s near-term growth prospects.
2. Price Target Increased
Alongside the downgrade, the firm raised its 12-month price objective to €9.20 from €8.50, reflecting potential for valuation expansion if strategy improvements materialize.
3. Cited Strategic Shortfalls
The firm pointed to Stellantis’s relative underinvestment, slower product rollouts, softer market share, compressed margins, weaker free cash flow and higher leverage compared with volume peers.
4. EV Sector Pullback Pressures
A $65 billion global reversal in electric vehicle ambitions highlights broader demand risks and valuation pressures for automakers, including Stellantis, navigating a slowing EV market.