the news from Investor Day 2024. Nice substantial upside for the prices?

Among the listed companies to keep an eye on in today’s session is Stellantis. The automotive giant is currently holding the long-awaited Investor Day 2024. This is an event from which very important information on the group financial objectives and on the dividend policy.

As can be seen from the graph below, the performance of the stock while awaiting the indications of Investor Day 2024 is not the best. In a general context that sees the Ftse Mib falling by around 1 percentage point, Stellantis shares are losing 2.5 percent, ranking among the worst of the day. The sales underway today on the automotive giant affect its performance on a monthly basis which is now negative by 2.5 percent. There is no alarm situation, however, because compared to a year ago the stock has increased by 28 percent.

Stellantis is therefore a healthy listed company and some specifics of Investor Day 2024 could influence its trend.

While waiting to hear the news, traders can satisfy themselves with the financial indications for 2024 and the dividend policy that the management has provided precisely in view of the appointment with investors.

Let’s start right from dividend question which, as is known, is the one that interests investors the most.

News from Stellantis’ dividend policy

Before the start of Investor Day 2024, Stellantis management announced that it is updating the plan on the capital of the listed company. More specifically, liquidity levels have been set with a target of between 25 and 30 percent of revenues for the medium term with a shift in focus to capital efficiency and support for shareholder returns.

Precisely regarding the remuneration of shareholders, the leaders of the automotive giant have stated that both the buyback of own shares and ordinary dividends will be used to remunerate the shareholders’ capital guaranteeing for 2024 a greater distribution of 7.7 billion euros between dividends and buy-backs.

The good news from Stellantis’ dividend policy is that the company will try to hit the high end of the 25-30 percent range in the dividend distribution policy. This would be a clear improvement compared to the 25 percent that has characterized the automotive giant’s dividend policy in recent years.

Another preview given in view of the Investor Day concerns the financial targets for the current year. The listed company aims to achieve a double-digit adjusted operating income margin and a positive industrial free cash flow by the end of the year. Coming to the numbers, the adjusted operating income margin is seen between 10 and 11 percent in the first half of 2024 while industrial free cash flow should be at lower levels than the previous year. According to company management, however, the launch of new models, actions on costs and above all the expected improvement in working capital could allow for an improvement in the adjusted operating income margin and industrial free cash flow during the second half of the year. exercise.

Equita’s forecasts for Stellantis Investor Day 2024

Equita analysts have also put their forecasts in black and white in view of Investor Day 2024. The indications do not differ much from the projections provided by Stellantis itself and which we referred to previously. Basically Equita expects the confirmation of the 2024 qualitative guidance which were communicated at the beginning of the year both in terms of the adjusted Ebit above 10 percent and in terms of the positive free cash flow.

Additional specifications fromimplementation of new platforms According to the Milanese SIM, they could be useful to shed light on the current uncertain macro context. The analysts then recalled that during the presentation of the business plan in March 2022, the top management of the automotive giant had provided guidance for the year 2024 which assumed a turnover of 200 billion euros, an adjusted ROS of over 10 percent and a free cash flow of over 6 billion euros.

According to consensus indications, it is already very likely that the turnover will not be achieved. Equita expects a figure of 188 billion euros while the Factset consensus actually drops to 186 billion euros. However, there should be no difficulty in achieving two other very important parameters: the adjusted ROS (should be equal to 11.3 percent, well above the 10.9 percent consensus) and the free cash flow (should be equal to at 8 billion euros, above the 11.3 billion euros expected by the analysts’ consensus.

In short, the impression one gets is that Stellantis’ 2024 is destined to be characterized by both light and shadows. How should we position ourselves on stocks in the face of this prospect?

Buying Stellantis shares is Equita’s advice

Equita’s view on Stellantis shares is decidedly optimistic. For the experts of the Milanese SIM, in fact, the automotive giant is a buy (rating buy). The target price assigned is also very significant and is equal to 24.5 euros. We are therefore faced with a decidedly bullish view. Stellantis shares are currently trading at 19.7 euros and therefore the upside potential is quite substantial.

To implement this investment idea (and therefore buy Stellantis shares with a view to rising) you can use both banks such as Fineco and brokers such as eToro.

• Fineco: it is the bank with the best trading platform in Italy and allows you to buy shares, trade with CFDs and trade with the most exclusive super CFDs. Fineco recently launched the new trading-only account with no fixed costs which is ideal for beginners.

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• eToro: Allows you to both buy real stocks and make trading through stock CFDs operating with leverage. Furthermore, eToro offers copy trading with which to replicate the strategies of the best traders.

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