Stellantis Shares Surge Ahead Of Full-Year Results: Can The Auto Maker Keep To The Road?

Shares in Stellantis NV STLA, the multinational carmaker, have enjoyed a stellar ride during the past year and investors are hoping this will be justified by its full-year earnings to be revealed on Thursday.

Shares have gained 44% over the past year. Compare this with rivals Ford Motor Co F, which was down 2.7% over the same period, and General Motors Co GM with a loss of 11%.

What has the owner of Chrysler, Dodge and European marques Citroen, Fiat and Alfa Romeo done right that Ford and GM have not?

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Complex Structure

Stellantis retained its focus on consumer-pleasing mass-market models and — particularly in Europe — its range of electric vehicles has been well received. The company aims for 100% of European sales to be battery electric vehicles by the end of the decade and 50% in the U.S.

While the company has a complex structure, made up of multinational brands, primary stock listings in Paris, Milan and New York, and a 6% stake held by the French government, CEO Carlos Tavares has driven the company to achieve strong margins and quality earnings.

In the first half of 2023, revenues were up 14% to $50.6 billion off a 7% increase in shipments.

Full-Year Results Expectations

It’s not been an easy year for U.S. carmakers, hit by just over a month-long strike by auto workers union members in the fourth quarter. However, both Ford and General Motors reported forecast-beating fourth-quarter results.

So, what’s expected from Stellantis on Thursday?

Consensus estimates put Stellantis’ full-year earnings per share at $5.69, which would beat the previous year by 1.6%.

Revenues, meanwhile, are expected to come in at $200 billion for the full year, which would be an increase of 5.7% on full year 2022.

Net cash is expected to total around $32 billion and research and development costs are seen at 7% of sales, according to a recent note from Jeffries.

With such a large cash hoard, investors may be hoping for some good news on shareholder returns at Thursday’s presentation.

“Stellantis management should soon shift to returning capital to shareholders at a more aggressive pace. and may soon announce a significant share buyback program or a special dividend,” said Scott Olson, analyst at Seeking Alpha.

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