Deutsche Bank has trimmed its 12-month price target for Stellantis NV to €7.00 from €8.00 while retaining a Hold recommendation. The move follows the automaker's disclosure of sizeable one-off charges tied to the second half of 2025 and preliminary H2-25 results alongside a 2026 outlook, according to the bank.
Stellantis shares were trading at $7.33 and had fallen 27.3% over the prior week at the time of the update; InvestingPro data show the stock changing hands at roughly 0.24 times book value. Deutsche Bank said the scale of the charges - and the portion that will affect cash - came in above market expectations. Even when the reported results are adjusted to strip out one-time items, H2-25 earnings still missed analyst forecasts, the bank added, and the guided cash burn was lower than consensus had expected.
Deutsche Bank described the company’s accounting moves as a "kitchen sinking exercise," noting that the approach could improve future reported earnings growth because depreciation and amortization expenses would be structurally lower going forward. That potential benefit, however, will be partially offset by rising costs associated with onshoring production to the United States, the bank said.
As part of its funding and capital response, Stellantis has said it will halt its dividend and intends to raise capital via up to €5 billion of subordinated perpetual hybrid bonds, a step Deutsche Bank had anticipated. Separately, the automaker indicated it will record approximately €22 billion of charges in H2-2025. Management attributed the decision to a strategic reorientation to accommodate a broader mix of powertrains and to a reassessment of earlier assumptions, saying the company had overestimated the pace of the energy transition and experienced prior operational shortcomings.
In a related transaction, LG Energy Solution will acquire Stellantis’s 49% stake in the NextStar Energy joint venture, giving LG full ownership of the Windsor, Ontario battery facility. That site has attracted over CAD $5 billion of investment, according to the announcement.
Market analysts have varied in their responses to the developments. Jefferies signaled that Stellantis could incur additional one-off items in the range of €5 billion to €9 billion as part of a wider strategy overhaul. Morgan Stanley moved to downgrade the stock from Overweight to Equalweight, citing concerns about the company’s investment pace and financial metrics.
Operationally, Stellantis is also pursuing an immediate sales response in Europe, implementing deeper price cuts on new cars in France to stimulate volumes in its largest market on the continent. The combination of sizeable charges, balance-sheet actions and pricing moves has prompted reassessments across the sell-side and raised questions about near-term earnings and cash dynamics.
Key points
- Deutsche Bank cut its price target on Stellantis from €8.00 to €7.00 and kept a Hold rating after the company disclosed large H2-25 charges and a weaker earnings profile.
- Stellantis will suspend its dividend and plans to issue up to €5 billion of subordinated perpetual hybrid bonds; it also announced roughly €22 billion of charges for H2-2025 and is selling its 49% NextStar Energy stake to LG Energy Solution.
- Analysts from Jefferies and Morgan Stanley have highlighted potential additional charges and downgraded views, while the automaker is cutting prices in France to lift volumes.
Risks and uncertainties
- Cash and earnings risk - The size and cash-relevant portion of the reported charges exceeded expectations, and guidance for cash burn was below consensus, indicating near-term balance-sheet and liquidity pressure.
- Execution and cost risk - Onshoring in the US will raise costs that partially offset future depreciation and amortization benefits, creating uncertainty for margin recovery.
- Market and strategic risk - The company’s strategic shift away from a heavy electric-vehicle focus and the sale of the JV stake introduce transition risk as pricing moves and restructuring take effect.
Overall, investors and market participants will be watching Stellantis’s execution of its capital plan, the magnitude of any further one-off items referenced by sell-side analysts, and the cash flow implications of both the charges and the announced funding measures.