By Dominic Chopping
Stellantis is scheduled to report full-year earnings on Wednesday. Here is what you need to know:
REVENUE FORECAST: The maker of Jeep, Dodge and a dozen other brands is expected to post revenue of 156.18 billion euros ($163.37 billion), according to a FactSet poll, down 18% from 189.54 billion euros in 2023.
ADJUSTED EBIT FORECAST: Adjusted earnings before interest and taxes is expected to fall to 8.9 billion euros in 2024 from 23.92 billion euros in 2023, according to a FactSet poll.
Stellantis shares have fallen 45% in the past 12 months at 13.43 euros.
WHAT TO WATCH:
--The auto maker reported fourth-quarter shipment data a month ago which pointed to a 9% decline in group shipments on year, mainly reflecting North America inventory-reduction initiatives. The scale of the U.S. inventory correction has normalized U.S. dealer inventories, putting the company in a strong position to support the arrival of new products in 2025 from Jeep, Ram and Dodge, Morgan Stanley analysts said.
--Stellantis has guided for a 2024 adjusted operating margin of between 5.5% and 7% and negative free cash flow of between 5 billion and 10 billion euros. Barclays expects the company to achieve a full-year margin at the lower-to-mid end of the range and models negative free cash flow of 6.45 billion euros. The bank said its estimates reflect weak underlying EBIT with weak pricing/high discounts to facilitate inventory reduction and continuing working-capital headwinds.
--For 2025, it is difficult to say whether Stellantis guides quantitatively or qualitatively, analysts at HSBC said. In the former case, the bank would expect guidance for a 5.5%-7.0% adjusted operating margin, while in the latter case, it could be "around mid-single digit adjusted operating margin."
--HSBC expects 2025 guidance of positive free cash flow, and although pricing will probably remain a headwind this year, 3%-4% shipments growth should provide some support to earnings, it said.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
February 24, 2025 09:08 ET (14:08 GMT)
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