(Telestock) – Equity he cut the recommendation on Stellantisan Italian-French automotive giant, at “Hold” as the positive elements of the equity story that he highlighted several times could be overshadowed by weak news flow which is expected soon in particular due to: decline in volumes and pressure on prices starting from the second half of the year; weak first half performance; macroeconomic context that does not help improve the visibility of the second half of the year; new models that will have a positive contribution at mix level, but mainly from next year.
The broker then reduces the estimates 2024-25 (average turnover -3%, adj. EBIT -7%, adj. net profit -6% and FCF -6%) mainly due to: lower volumes (-4%) both due to the market slowdown, phase-in/phase-out of new models and launch of new platforms; the expected reversal of the price trend.
The Cpositive characteristics of the equity story remain valid, but in this phase they take a back seat: cheap multiples; industrial net cash and visible FCF, allowing confirmation of buy-backs and mid-/high-single digit yield dividends; merger synergies under the leadership of CEO Tavares (who has a successful track record with PSA-Opel).