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AUTOMOTIVE: Stellantis (STLA Baa1/BBB+/BBB+[P]): Profit Warning

AUTOMOTIVE
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Credit negative, material downgrades.

  • We flagged this last week following CFO comments: https://marketnews.com/automotive-stellantis-stla-baa1-bbb-bbb-p-cfo-comments.
  • Following intense scrutiny on NA inventory it is accelerating incentives and doubling its planned shipment declines locally.
  • It’s blaming industry dynamics including lower market forecasts, rising supply and Chinese competition, all of which have been well known in recent months. It’s left trying to cut into a weak market.
  • Material downgrades to FY24 forecasts with adj. EBIT margin now seen in 5.5-7%, down from “double digit” previously. Industrial FCF guidance was always vague at “positive”. It now sees -€5 to -€10bn due to lower margins and “temporarily” elevated WC; that’s surprising with inventory declining.
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Credit negative, material downgrades.

  • We flagged this last week following CFO comments: https://marketnews.com/automotive-stellantis-stla-baa1-bbb-bbb-p-cfo-comments.
  • Following intense scrutiny on NA inventory it is accelerating incentives and doubling its planned shipment declines locally.
  • It’s blaming industry dynamics including lower market forecasts, rising supply and Chinese competition, all of which have been well known in recent months. It’s left trying to cut into a weak market.
  • Material downgrades to FY24 forecasts with adj. EBIT margin now seen in 5.5-7%, down from “double digit” previously. Industrial FCF guidance was always vague at “positive”. It now sees -€5 to -€10bn due to lower margins and “temporarily” elevated WC; that’s surprising with inventory declining.