Sometimes, you’ve got to wonder what shareholders expect out of a company. Legacy automaker Stellantis (NYSE:STLA) recently announced a major new sale to take place over the next three years. Investors weren’t exactly excited about the huge new chunk of revenue and punished Stellantis for its success by sending shares down fractionally in Monday morning’s trading.
Stellantis established a new “frame agreement” with Ayvens, a leasing and fleet management operation in Europe, to sell them as many as half a million vehicles over the next three years. Deliveries of said vehicles will start before July, reports note, in the first half of 2024.
Several specific details weren’t revealed, as apparently, they don’t exist; details from order quantity to delivery date are declared “flexible” and can be altered as required. Ayvens will get access to a range of brands, including Vauxhall, Fiat, Opel, and several others, with one of those flexible details mentioning the potential to access models from the entire Stellantis lineup.
So, Why the Investor Distaste?
That’s a whole lot of sales coming in, and at a time when they’re sorely needed. After all, the used car market—at least in the United States—is in open decline. Prices are plunging from their pandemic highs but haven’t yet reached pre-pandemic levels. With the consumer increasingly distressed, sales volumes and prices are likely to continue falling. Of course, at a time like this, hearing that Stellantis CEO Carlos Tavares took home 518 times what the average Stellantis worker did might not sit well with investors. Further, the revelation that the Waymo deal isn’t really dead yet might be leaving some investors cold.
Is Stellantis a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on STLA stock based on 14 Buys, two Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 63.69% rally in its share price over the past year, the average STLA price target of $28.61 per share implies 8.29% upside potential.
