Stellantis N.V. STLA has been grappling with declining sales and market share, a trend that began before this year. In 2023, it was an outlier among competitors as its losses surpassed competitors and its market share fell below General Motors, Toyota, Ford and even Hyundai. The company has reported multiple consecutive quarters with sales declines of 20% or more in the United States. Recently, its U.S. market share dropped below Honda’s. Losing market share appears to be a significant shift for a company that includes the legacy Chrysler brand and Jeep, one of the industry’s most valuable names. 

Despite eye-catching profits of nearly $20 billion last year, Stellantis has seen a significant drop in profits this year, leading to criticism of CEO Carlos Tavares. Stellantis’ U.S. dealers have criticized Tavares for his short-term profit-focused decisions that have hurt American brands like Chrysler and Jeep. The company has cited improvements in market share, sales and inventory reductions to counter the dealers' public complaints.

Besides dealers’ criticism, labor issues are also a challenge for the company. The United Automobile Workers (UAW) has threatened Stellantis with a potential strike over the company’s failure to meet investment commitments. Stellantis claims that a strike would be illegal under the current circumstances, a claim the UAW disputes. The company has delayed the reopening of its Belvidere plant, cut a shift at Warren Truck, and faces criticism from unions in Italy as well.

Stellantis is also navigating a shifting electric vehicle market, which has grown more uncertain since last year. In response to the company’s struggles, Stellantis announced new leadership changes. Antonio Filosa, global head of Jeep, will take over responsibilities for North America. Former CFO Natalie Knight is being replaced by Doug Ostermann, previously COO of Stellantis China. The company has also made executive changes in Europe, China, Maserati and Alfa Romeo.

While the board has expressed unanimous support for CEO Carlos Tavares, Stellantis confirmed he will retire at the end of his contract in early 2026. A special board committee, led by Chairman John Elkann, is searching for his successor, with plans to complete the process by late 2025. Stellantis also slashed its earnings forecast as it requires larger investments to improve its U.S. operations amid increased competition from China. The company is accelerating its plans to bring dealer inventory down to 300,000 vehicles by the end of this year.

STLA’s Zacks Rank & Key Picks

Stellantis currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the auto space are Modine Manufacturing Company MOD, BYD Company Limited BYDDY and Suzuki Motor Corporation SZKMY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MOD’s fiscal 2025 sales and earnings suggests year-over-year growth of 8.44% and 18.77%, respectively. Earnings per share (EPS) estimates for fiscal 2025 and 2026 have improved by a penny and 8 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.88% and 17.12%, respectively. EPS estimates for 2024 and 2025 have each improved by a penny in the past 30 days.

The Zacks Consensus Estimate for SZKMY’s fiscal 2025 sales and earnings suggests year-over-year growth of 7.36% and 22.51%, respectively. EPS estimates for fiscal 2025 and 2026 have improved by 78 cents and 99 cents, respectively, in the past 60 days.

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