Investing.com -- Citi raised its price target for Stellantis NV (NYSE:STLA) to €13 and initiated a 90-day positive short-term view given recovery potential after the stock’s sharp decline in 2024.
Stellantis was the worst performer in European autos last year, down about 38%. Its strong U.S. market exposure and no reliance on China could drive early 2025 gains, despite uncertainty over earnings and free cash flow recovery.
The company saw a robust December, with U.S. demand holding steady and inventory levels improving. Citi notes Stellantis' earnings could benefit from easier comparisons in the second half of 2024.
However, challenges remain. U.S. sales are unlikely to exceed FY24’s 1.3 million units, and high dealer incentives weigh on margins. Lower-priced products and new EV models may not offset margin pressures.
Citi continues to prefer Renault (EPA:RENA), Volkswagen (ETR:VOWG_p), and Porsche over Stellantis due to their valuation and earnings stability.