Freedom Cuts Stellantis Target to $6.8, Maintains Earnings Recovery Outlook

Freedom Broker analysts maintained their “Buy” recommendation on Stellantis N.V. (STLA) shares but cut the target price from $7.50 to $6.80 after weak third-quarter deliveries. At the current price of $4.27, the upside potential is 59.25%. Experts still expect that a refreshed model lineup will help the automaker return to positive net profit in 2026.

A weak quarter changed the valuation but not the recommendation

Stellantis is an international automaker formed in 2021 through the merger of Fiat Chrysler Automobiles and Groupe PSA. The group brings together 14 brands, including Jeep, Ram, Dodge, Chrysler, Peugeot, Citroën, Opel, and Fiat.

Freedom’s main argument in favor of the stock is the expected earnings recovery after two years of declining revenue. New models could support deliveries and increase investor interest in the shares, experts believe. However, the third-quarter operating results were worse than their expectations and required forecasts to be revised.

On October 13, Stellantis released consolidated delivery data: they totaled 1.29 million vehicles, down 1.1% year over year and 19.5% versus the second quarter. Freedom had expected 1.37 million vehicles.

After the publication, analysts lowered their full-year revenue forecast from €161.6 billion to €159.3 billion. The new benchmark implies growth of 3.8% versus 2025. The target-price cut also reflects higher discount rates—under this approach, the company’s future cash flows are valued less in today’s money.

North America lags the market

The main weak spot was deliveries in North America: they fell 11.6% year over year to 357 thousand vehicles. The primary reason was planned summer production stoppages, which hit Jeep models the hardest. The decline was partly offset by Ram vehicles: the brand’s sales were supported by new and refreshed models, as well as an expanded powertrain lineup.

Stellantis had previously warned that financial results for the second half of the year would be skewed toward the fourth quarter. Nevertheless, analysts point to the company’s underperformance versus the regional market. By their preliminary estimate, total passenger-car sales in North America for the third quarter showed near-zero year-over-year change. Thus, Stellantis’ drop in deliveries was noticeably larger than the change in the market overall. 

European growth did not offset declines in other regions

In Europe, deliveries increased by 10.1% to 588 thousand vehicles—about 46% of the group’s quarterly volume. Growth was driven by both Stellantis’ own brands and Leapmotor models. Against the overall trend in new-car sales in the EU, the company’s result looks strong, analysts note.

In South America, deliveries totaled 251 thousand vehicles, virtually unchanged year over year. An increase in sales in Brazil by 13 thousand vehicles was offset by declines in other countries, primarily Argentina.

In the Middle East and Africa, deliveries fell 21.1% to 75 thousand vehicles. The main reason was a reduction in deliveries to Turkey by about 21 thousand vehicles amid worsening market conditions. 

A return to profitability remains the key benchmark

According to Freedom’s forecast, Stellantis’ earnings per share in 2026 will be €0.40 versus a loss of €7.75 per share in 2025. In 2027, experts expect it to rise to €0.98. These are forecast figures that assume the business continues to recover.

Among the main risks, analysts highlight intense competition and trade restrictions that could lead to a loss of market share in the U.S. Additional pressure on the share price could come from new write-downs related to a shift in the company’s strategy. 

The third-quarter results contrast with the stronger dynamics of the previous period. In July, Freedom noted that second-quarter deliveries exceeded expectations thanks to the launch of new models in North America. At that time, the automaker posted stronger vehicle-delivery results than the market expected.

Not an individual investment recommendation.