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Stellantis (NYSE:STLA) Gears Up Italian Production
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Stellantis (NYSE:STLA) Gears Up Italian Production

Story Highlights

Stellantis has a new strategy, and is working on rebuilding relationships in the post-Tavares era.

In a time when many firms are looking to pare back production, it is the opposite story for legacy automaker Stellantis (STLA). Rather than reduce production, it is instead looking to improve, particularly in Italy, according to word from Reuters. The news is inspiring shareholders as well, sending share prices up nearly 2% in Tuesday afternoon’s trading.

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Not only will Stellantis keep all its currently-operating Italian factories open, noted the report, but it will also have said factories step up their output in 2025. That may seem like an odd dichotomy, but it works due to one key factor: new models.

Stellantis will be producing two compact car models in Pomigliano as part of its “STLA Small” platform. STLA Small will not start fully until 2028, but when it does, Pomigliano will be front and center. Moreover, Italian plants will also roll out the DS7, the Lancia Gamma, and the Jeep Compass, in both hybrid and full electric models. It certainly does not hurt that the Italian government plans to spend around $1.05 billion to support the automotive sector in the country, meaning Stellantis is in line for at least some government cash.

A Brand New Day—and Strategy—At Stellantis

The sudden departure of CEO Carlos Tavares rocked investors and left Stellantis on its back foot. But give it credit; it has already bounced back and is working on a whole new plan, noted a Reuters report. The report noted that Stellantis is “…acting swiftly to dismantle the legacy of its former CEO and repair relations with dealers, industry partners, governments and workers.”

The recent word from Italy, promising help to Italian automakers, suggests that may have been the right move. Further, Stellantis got back into the ACEA, a European lobbyist group, less than a week after Tavares’ departure, suggesting the new “executive committee” in charge at Stellantis has a vision in mind for the company’s future already.

Is Stellantis Stock a Good Buy Right Now?

Turning to Wall Street, analysts have a Hold consensus rating on STLA stock based on seven Buys, 11 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 38.72% loss in its share price over the past year, the average STLA price target of $14.88 per share implies 10.88% upside potential.

See more STLA analyst ratings

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