European-U.S. conglomerate automaker Stellantis (STLA) posted a steep 70% drop in profit for 2024 but says it has a road to revenue growth this year. The owner of brands like Jeep, Dodge, Fiat, Chrysler and Peugeot posted full-year 2024 net profit of €5.5 billion ($5.77 billion), down 70% on 2023 and well below the €6.4 billion expected. STLA also saw a sharp decline in sales as net revenues of €156.9 billion was down 17% compared to 2023 as it continued to struggle with a slump in the U.S.
Tough Year for STLA
It’s been a difficult year for the car giant which culminated in the sudden departure of CEO Carlos Tavares in December. He had led the company following the 2021 merger between Fiat Chrysler Automobiles and PSA Groupe.
Chairman John Elkann, who continues to lead the company while it searches for a new CEO, said 2024 “was a year of stark contrasts for the company, with results falling short of our potential.”
Stellantis, the world’s fourth-largest automaker by volume, faced a range of headwinds in the key U.S. market, where it registered a 28% decline in shipments in fourth quarter of last year. Prior to this in September it warned of lower-than-expected sales “across most regions” in the second half of 2024. Global shipments declined 9% in the fourth quarter, an improvement on the 20% drop registered in Q3.
Like many carmakers – not least Tesla (TSLA) – the company has been hit by a decline in demand, increased competition from China and some challenges relating to performance and a lack of model updates in the U.S. in particular.
STLA Targets Growth in 2025
Stellantis said that despite the tough year it sees a path to profitable growth and positive cash flow in 2025. However, the early signs are not terribly encouraging.
The firm’s sales across the Europe and the UK dropped by 16% in January compared to the same month in 2024, the European Automobile Manufacturers’ Association said this week. With industry sales declining by around 2% over the year, the group’s share of the market fell from 18% to 15.5%.
Commenting on today’s results, Elkann said the company remains “firmly focused on gaining market share and improving financial performance as 2025 progresses.”
Stellantis shares in Milan (IT:STLAM) fell about 4% on the earnings report.
Is STLA a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy rating on STLA stock, based on five Buys, seven Holds and one Sell. The average STLA price target of $14.51 implies around 3% upside, however these numbers are likely to change in the wake of the earnings report.
