Shares of Stellantis plummeted to their lowest level in a decade on Wednesday, dropping 5.7% to close at $5.12. The automotive giant has seen its stock price collapse by more than half during 2026, positioning it as one of the weakest performers in the global auto sector this year.
Wednesday’s selloff followed the announcement of a global recall affecting approximately 955,000 vehicles, with 848,000 units in the United States alone. The recall addresses a radio software malfunction that prevents rear-view cameras from functioning properly on several models, including popular Jeep vehicles. The company stated that an over-the-air software patch fixes the problem, and there have been no reported injuries linked to the defect.
The recall announcement triggered a 6.2% stock decline in mid-August, compounding an already challenging year for the automaker.
Stellantis released its second-quarter earnings on July 30, revealing net revenues of €43.5 billion, up 13% compared to the prior year. North American sales surged 32%, which appeared promising at first glance. However, the company’s overall profit margin collapsed to a mere 1.8%, and its European division recorded an operating loss.
Aggressive pricing from budget-focused Chinese electric vehicle manufacturers and intensifying regional competition have eroded pricing power across Europe. While this challenge isn’t exclusive to Stellantis—both Mercedes-Benz and BMW have acknowledged similar headwinds—it represents a particularly significant obstacle for a company already struggling to regain momentum.
The automaker did manage to generate positive free cash flow of €1.0 billion in Q2, offering a glimmer of hope. Strong demand for the Ram 1500 in the United States demonstrated resilience in the premium truck segment.
Stellantis reported approximately $1 billion in losses during 2025 after operating profit plunged from roughly $25 billion during the post-merger peak years to less than $10 billion in 2024. The dramatic decline stemmed from excessive dealer inventory buildups, necessitating painful volume adjustments. Former CEO Carlos Tavares, who orchestrated the Fiat Chrysler and Peugeot merger, was ousted as a result.
Barron’s officially retracted its turnaround recommendation for STLA this week. The publication had initially recommended the stock in February at $7.62. Following a 24% crash on February 6—triggered by a $26 billion asset impairment and dividend elimination—the stock has fallen an additional 29% since Barron’s made its call.
New chief executive Antonio Filosa unveiled a recovery strategy in May projecting €190 billion in revenue by 2030 and a 7% operating margin. The plan anticipates positive free cash flow returning in 2027. Markets responded tepidly, with shares trading around $7.50 at the time before sliding to current levels.
STLA currently trades at less than 5 times projected 2027 earnings. By comparison, General Motors commands a multiple of approximately 5.7 times. While the valuation appears attractive, analysts caution that earnings forecasts may still be overly optimistic given persistent competitive threats from Chinese manufacturers.
Wall Street analysts currently assign STLA a Hold consensus rating, comprised of two Buy recommendations, 10 Hold ratings, and three Sell ratings issued over the past three months. The average analyst price target stands at $6.88, implying roughly 34% upside potential from current trading levels.
Morningstar’s fair value assessment sits considerably above the current market price, while recent upgrades from AlphaValue/Baader Europe indicate some analysts believe medium-term value exists at these depressed levels.
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