It burned six billion euros in a single day. In fact, the value amounts to this much – to be precise, 6.3 billion – of shares burned on Black Tuesday, last April 30th, the very day of the announcement of the first quarter accounts. The stock, which started out weak as expected by analysts, dropped 10.1%. Market and analysts are asking: what will happen now?
The feeling of many is that the relationship of Natalie Knight, Chief Financial Officer of Stellantis, scared the market: the 12% drop in revenues went beyond what many analysts expected. The fault of the market and the ongoing strategy of running out of stocks to prepare for the launch of the new models is the explanation. In fact, this is it Carlos Tavares’ first big slip, who since Stellantis existed, as CEO, has achieved one growth after another, thus justifying his emolument of over 36 million euros (against which, however, many shareholders had expressed their opinion). But there is another big loser: it is Italy.
In fact, the InsideOver website writes, “Stellantis is a vehicle in which one of the driving wheels is less solid than the others.” The reference is to Italy, where the current situation – Mirafiori is essentially closed for a whole month from today, there is a strike for safety in Pomigliano – is attributed to clear strategic choices. Per InsideOver, Tavares is “aarchitect of a transition that in the automotive field has allowed two countries, to simplify, to be the industrial winners of the 2021 merger. Leaving one loser. The real winners are France and the United States. The big loser is theItalyin which Stellantis managed to return above quota in 2023, for the first time in several years 500 thousand cars produced but which, judging from the strategies revealed at the beginning of 2024, appears secondary in the group’s strategy”.
To support this thesis, we look at car production. As mentioned, more or less half a million cars produced in a year in Italy, which they are almost double in France, i.e. 950 thousand, while in Spain 1.7 million are produced (and Stellantis has several factories here) and in Germany they reach 3.3 million. “One wonders why, with such anemic revenues, Stellantis has chosen to shorten the precious Italian supply chains at the beginning of the year.”
Italy is struggling: at a production level, the lack of incentives for electric cars still has an impact for the Group. The Fiat 500e – produced in Mirafiori – sells ridiculously low prices, at least in Italy; the best-selling model is the Fiat Panda, the one produced in Pomigliano which we have chosen to keep alive at least until 2030; Jeep continues to deliver good results, even here with a “dated” model like the Renegade and fortunately for the Group with the new Avenger (of which they also had the good sense to launch hybrid versions, not just electric). So, what to do? And what will happen?
According to the experts of the online newspaper Money.it, Stellantis is entering what is called “bear market”, i.e. a period in which the stock loses 20% in the space of a month. The risk is that, after reaching 24.50 euros, it now can slip up to 7.30 or even 7. According to MilanoFinanza, after the quarterly accounts, Mediobanca Research cut the rating from outperform to neutral (with target price 24 euros), Nomura reduced the target price from 27 to 24 euros, while Citi confirmed the nuetral rating and the target price for 22 euros
Nathalie Knight, in her report, specified that the Group expects to achieve the estimated objectives for the year, with an increase in productivity and revenues. She remembered that it is the launch of twenty-five new models is imminent, eighteen of which are electrified – it was underlined that BEV sales have risen by 13% – while in recent weeks Carlos Tavares had announced, when inaugurating the new Mirafiori department for the production of transmissions for BEV vehicles, 100 million euros of investment in the Fiat 500e, for a new battery and a new platform. A relaunch, however, linked to the arrival of the incentives promised by the government.
On the union and worker front, at the moment, there is no reaction: there is a wait to understand the evolution of the situation and, above all, whether the financial decline could be a lever to further support the thesis of the market crisis and implement new production reductions and consequent use of social safety nets also in the other factories.
