Stellantis stock rises as automaker's turnaround plan, cost cuts gain traction
Automaker reconfirms 2026 guidance as adjusted operating income jumps 184%
Quick Look
- Stellantis shares climbed 9% in Milan after Q3 results beat low expectations.
- The automaker reported a 184% rise in adjusted operating income and reaffirmed its 2026 guidance, signaling progress in its 60 billion euro turnaround strategy.
AI-generated summary
Why It Matters
Stellantis announced a 60 billion euro turnaround plan in May to address performance issues. The strategy includes significant investment in North American operations and new vehicle technology.
Shares of Stellantis were up Wednesday as the European car giant's third-quarter results showed it was making progress with its 60 billion euro turnaround plan.
Third-quarter revenues rose 1% to 37.6 billion euros from a year ago, the Chrysler and Jeep owner said on Wednesday, while adjusted operating income rose 184% to 256 million euros from 90 million euros a year earlier.
The automaker's industrial free cash flow improved to negative 4 billion euros, up from negative 4.3 billion the year prior.
Stellantis on Wednesday also reconfirmed its 2026 guidance and target to achieve positive free cash flow next year, which is a main focus for investors.
"Q3 was soft, but consensus expectations were far lower. Key here is that '26 Guidance was maintained while other auto OEMs and suppliers are cutting on elevated costs," RBC Capital Markets analyst Tom Narayan said Wednesday in an investor note.
Stellantis stock rose roughly 9% Wednesday in Milan and was also trading higher in New York, but it remains sharply down since the beginning of the year.
Stellantis CEO Antonio Filosa told investors Wednesday that the company is ahead of schedule on its turnaround plan, which was announced in May. He said Stellantis expects to exceed its previously announced cost-cutting efforts of 6 billion euros under the plan by 2028, including 2.4 billion euros to start 2027.
"We are very confident in reaffirming our '26 guidance. Those include '27 free cash flow positive," Filosa said Wednesday in response to concerns about the carmaker's ability to achieve its free cash flow target.
Stellantis' 2026 guidance includes a mid-single-digit percentage increase in net revenue and a low-single-digit adjusted operating margin.
Stellantis' turnaround plan includes investing 36 billion euros in its portfolio of automotive brands, with 60% of the cash to go towards its struggling North America sector. It also plans to introduce new vehicles, refresh models, and incorporate new technologies in its products.
Stellantis is targeting roughly 23% revenue growth, from 154 billion euros last year to 190 billion euros by 2030, with a 7% adjusted operating margin by then.
What to Watch
AI outlook — possibilities, not facts
Stellantis to achieve positive free cash flow in 2027.
Possible · Within years
Open Questions
- Will the North American sector meet the 2028 cost-cutting goals?
- Can the company sustain positive free cash flow beyond 2027?
