Automotive giant Stellantis (STLA) has unveiled a new strategy focused on its roots making classic American cars.
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The Dutch company, which acquired American automaker Chrysler in 2021, said that its reviving the Jeep Cherokee sport utility vehicle (SUV), bringing back the gas-engine version of its Dodge Charger muscle car, and pausing development of an all-electric Ram pick-up truck.
Stellantis said that the new strategy is aimed at reinvigorating well-known American brands, such as Chrysler and Dodge, whose sales have declined in recent years. The shift in strategy also comes after former Stellantis CEO Carlos Tavares left the company last December. A new permanent CEO has not yet been named.
Trump Era
Since its formation through a merger of Chrysler and France’s PSA Group four years ago, Stellantis’ share of the lucrative U.S. auto market has declined to 8% from 12.5%. The erosion has been blamed on a lack of new products, the discontinuation of popular nameplates such as the Jeep Cherokee SUV, and an overreliance on electric vehicles.
The company’s new back-to-basics strategy aims to reverse the declines seen in recent years. It also comes as U.S. President Donald Trump returns to power. Trump has revoked a previous electric vehicle policy for the U.S. and taken steps to bolster America’s oil and gas output. There is speculation online that Stellantis is seeking to align itself with Trump’s policies.
There are also media reports that Stellantis Chairman John Elkann met with Trump and top U.S. officials in Washington, D.C. ahead of the inauguration on Jan. 20. STLA stock has declined 34% over the last year.
Is STLA Stock a Buy?
The stock of Stellantis has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on five Buy, eight Hold, and one Sell recommendations issued in the last three months. The average STLA price target of $14.48 implies 9.95% upside from current levels.
