Stellantis posted a 13% rise in revenue for the second quarter of 2026, reaching €43.5 billion. Despite this increase in sales and a net income of €293 million, the company’s shares have fallen sharply, losing around 56.6% of their value since the start of the year.
Profitability Challenges Continue Despite Revenue Gains
The adjusted operating margin improved to 1.8% in the second quarter, up from 0.6% a year earlier. However, this level means the company earns about €1.80 on every €100 of revenue, which remains a slim profit margin. Operating performance varies by region, with North America showing a 32% revenue increase and reasonable results. By contrast, Stellantis’ European segment remained flat in sales and showed a slight negative margin of 0.6%.
Cash Flow and Industrial Reset Costs Weigh on Recovery
Stellantis generated a positive industrial free cash flow of €1 billion in the quarter, but the half-year total was still negative at €921 million. The company ended June with €44.1 billion available in industrial liquidity, within its target range.
Investors remain concerned about a €22.2 billion charge announced in early 2025, linked to changes in product plans and lower expectations for electrification efforts. About €6.5 billion of this charge will be paid in cash over four years. This sizable cost led to Stellantis canceling its dividend for 2026.
Market Skepticism Reflects Concerns Over Growth and Margins
Recent analyst downgrades underscore market doubts. Morgan Stanley lowered its rating to Underweight due to delays in new models. Berenberg cut its rating from Buy to Hold and dropped the price target from €7.80 to €5.10, citing slow margin recovery.
Stellantis’ FaSTLAne 2030 plan aims for a positive industrial free cash flow by 2027 and a 7% adjusted operating margin by 2030. It also targets €6 billion in annual cost savings by 2028 compared to 2025. The gap between current results and these goals explains why revenue growth alone has not eased investor worries.
Shares Continue to Decline Amid Uncertainty
Since January 2026, Stellantis shares have declined from €9.72 to €4.22. Despite signs of financial recovery, investors remain cautious, looking for clearer evidence that the company can restore profitability, fund its investments, and return value to shareholders.
Source: clubalfa.it