Shares of the struggling Jeep manufacturer soared. What convinced investors?

Stellantis, the manufacturer of Jeep, Ram, Peugeot, and Fiat vehicles, reported an 184 percent increase in adjusted profit for the third quarter and reaffirmed its outlook for the current year. The company also stated that its cost-cutting program is ahead of schedule. Against this backdrop, the automaker’s shares jumped 14% in the U.S. and nearly 13% on the Milan and Paris stock exchanges, marking their largest intraday gain since April 2025, according to Bloomberg.

Stellantis’s adjusted operating profit in the third quarter rose 184% year-over-year to €256 million ($285 million). The automaker maintained its full-year outlook, despite the fact that intensifying competition has led to a drop in car prices in Europe. At the end of the third quarter, Stellantis’s adjusted operating margin stood at 0.7%, and for the full year, the company expects it to be in the “low single-digit” range. Stellantis also reaffirmed its goal of achieving positive free cash flow next year—a metric that investors monitor most closely, according to CNBC.

— In North America, the company’s most important region, Stellantis posted a profit: adjusted operating income totaled €64 million thanks to the launch of new models, such as the hybrid Jeep Cherokee and the Ram 1500 pickup truck with a Hemi engine. However, shipments during the quarter were held back by scheduled production stoppages, the company noted.

— Meanwhile, in Europe, Stellantis reported an adjusted operating loss of €311 million. Bloomberg attributes this to falling prices and consumers switching to electric vehicles, which generate lower profits for the company.

— Industrial free cash flow (from the automaker’s core business only) remained negative in the most recent reporting period—minus €4 billion ($4.5 billion), compared with minus €4.3 billion a year earlier. This is worse than analysts’ expectations (€3.4 billion). Stellantis is implementing a profitability recovery plan costing approximately €60 billion: these funds will be used through 2030 to launch dozens of new models, primarily from the Jeep, Ram, Peugeot, and Fiat brands.

Europe's second-largest automaker is trying to emerge from a difficult period marked by declining business performance, Bloomberg reports. In February, the company announced a record write-down of assets, and earlier this year, it scaled back its electric vehicle strategy and unveiled plans to address quality issues. Among these issues, Bloomberg cites, for example, malfunctions in the battery system that caused batteries to drain and made it impossible to start the cars. All of this, the agency notes, has undermined confidence in the company and deterred buyers.

To address these challenges, Stellantis unveiled a plan in May to restore profitability, under which it plans to invest approximately €60 billion in the business by 2030. Of that amount, €36 billion will go toward the brands and the launch of dozens of new models—primarily Jeep, Ram, Peugeot, and Fiat, while the remainder will be allocated to platforms and new technologies. Refreshing its model lineup is particularly important for Stellantis in Europe, where the group’s mass-market brands, including Peugeot and Opel, face competition from Chinese manufacturers such as BYD, as well as Volkswagen and Renault, Bloomberg notes.

On October 28, following the release of the financial results, Stellantis CEO Antonio Filosa told investors that the company is ahead of schedule in implementing its recovery plan. According to him, Stellantis expects to exceed the previously announced cost-cutting target of €6 billion by 2028, including €2.4 billion by early 2027.

The key question is exactly how Stellantis intends to improve its profitability in North America and Europe. “We don’t believe that the product lineup alone will be enough,” noted Citi analyst Harald Hendrix.

“The third quarter turned out to be weak, but consensus forecasts were significantly lower. The key point here is that the forecast for 2026 remains unchanged, while other automakers and suppliers are lowering their forecasts due to high costs,” — wrote RBC Capital Markets analyst Tom Narayan in a note to investors (as quoted by CNBC).

Even before the report was published, analysts—including Michael Tindall of HSBC—had cited the high volume of unsold vehicles at U.S. dealerships as a cause for concern. According to a Stellantis presentation, as of the end of September, the company’s inventory at U.S. dealerships stood at 368,000 vehicles, equivalent to 84 days of sales—less than in June, when inventory was sufficient for 92 days. By the end of the year, the company expects inventory to drop to 320,000–350,000 units.

Since the start of the year, Stellantis shares in the U.S. have fallen more than 57%, hitting record lows, according to Bloomberg. Analysts are also cautious about the company’s outlook: 16 of the 22 analysts covering Stellantis stock recommend holding. Two advise buying, and four advise selling.

This article was AI-translated and verified by a human editor