Overview
Kepler Cheuvreux moved Stellantis from a Buy rating to Hold on Thursday following a revision to its profit outlook for 2026 and 2027. The brokerage attributed the change to weaker global demand expectations and the knock-on effects of the Iran war, which it expects to weigh on European markets in particular.
Demand and production assumptions
The broker cut its assumptions for global light vehicle demand and production to reflect the anticipated impact of the Iran war. Kepler singled out Europe as the region most likely to be negatively affected by these developments, and adjusted its forecasts accordingly.
Margin and cost concerns
Kepler warned that higher input costs and elevated oil prices will create margin pressure for Stellantis. The broker emphasized that the automaker 's turnaround toward improved profitability has been gradual, describing progress as "baby steps" rather than a completed recovery.
Price target and regional outlook
Following the forecast adjustments, Kepler lowered its price target for Stellantis by roughly 17 percent to 7.50. The revised outlook leaves Europe in a loss position for fiscal year 2026 in Kepler 's model, with an expectation of a faster margin decline for the third engine.
Upcoming event
Despite the downgrade, Kepler expects Stellantis 's Capital Markets Day on May 21 to include a full brand review, a strategic update and a new set of financial targets. The broker appears to anticipate that management will present refreshed plans, even as its near-term forecasts have been reduced.
Summary of implications
- Kepler's downgrade reflects lower demand and production assumptions tied to geopolitical disruption.
- Input cost inflation and higher oil prices are identified as immediate headwinds to margins.
- Stellantis faces a downgraded price target and a challenging European outlook for FY2026 under Kepler 's forecasts.