Stellantis Exits Non-Strategic Business

Stellantis N.V. (NYSE: STLA) has divested its 25% stake in GEFCO S.A., an auto transport company based in Europe. The buyer in the transaction was CMA CGM Group, a Europe-based supplier of logistics and transport services.

The financial terms of the stake sale have not been disclosed by the parties involved in the transaction. Shares of Stellantis slipped 0.6% to close at $14.85 on Friday. However, the stock rebounded and gained 1% in the extended trading session to close at $15.

Stellantis is a specialist in designing and manufacturing automobiles, light commercial vehicles, transmission systems, production systems, and others products. It also provides rental, leasing, financing, and other services. The company is headquartered in Hoofddorp, the Netherlands.

STLA was formed after a former French carmaker, Peugeot S.A., merged with Fiat Chrysler Automobiles N.V. in January 2021. The resultant company of this merger was named Stellantis N.V. in 2021.

Inside the Headlines

Stellantis’ CEO, Carlos Tavares, commented that the stake disposition in GEFCO was in line with its efforts to exit “the transportation and logistics industry.”

He added, “Moving forward, Stellantis now has an efficient global supply chain with diverse logistics suppliers, among which GEFCO continues to play a meaningful role.”

It is worth mentioning here that a 75% stake in GEFCO was sold to Russian Railways by Peugeot S.A. in 2012. Thereafter Stellantis acquired the remaining 25% interest in GEFCO as a result of the merger between Peugeot and Fiat Chrysler.

Presently, a 100% stake in GEFCO is owned by CMA CGM Group.

Analysts’ Take

Recently, Jose Asumendi, a J.P. Morgan analyst, reiterated a Buy rating on Stellantis with a price target of €21 or $22.84 (53.80% upside potential).

Also, two weeks ago, Tom Narayan of RBC Capital kept intact a Hold rating on the stock with a price target of €19 or $20.66 (39.15% upside potential).

Overall, the company has a Strong Buy consensus rating based on seven Buys and one Hold. Stellantis’ price forecast of $27.38 suggests 84.38% upside potential from current levels. Over the past year, shares of Stellantis have lost 16.5%.

Bloggers’ Sentiment

Per TipRanks data, the financial blogger opinions are 100% Bullish on STLA, as compared with the sector average of 68%.

Conclusion

Stellantis’ exit from its non-strategic business, GEFCO, will likely prove advantageous in the years ahead as the financial resources from this stake-sell will empower the company to strengthen its core and profitable businesses.

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