The maker of Jeep and Fiat ended the year with a loss for the first time in history due to electric cars

Concern Stellantis, which owns 14 automobile brands in the USA and Europe, including Jeep, Fiat and Peugeot, reported its first ever annual loss, resulting from the impairment of assets after a radical change of strategy. The record write-down had already been factored into the auto giant's quotes, which updated the minimum three weeks ago, so the market reaction to the report was calm.

The multinational conglomerate on Feb. 26 reported a €22.3 billion loss for 2025 as a result of a multibillion-dollar write-down announced earlier this month. On Feb. 6, Stellantis warned that it would report a €22.2 billion impairment of assets in its annual financial statements due to the winding down of investments in electric vehicles and quality problems that resulted from cost-cutting under former CEO Carlos Tavares.

Then this warning collapsed quotes Stellantis on European stock exchanges by 27% - to a historic low since the creation of the concern in 2021 through the merger of Peugeot and Fiat-Chrysler Automobiles. Today, the market reaction to the message about the annual loss was restrained: at trading in Milan, Stellantis securities fluctuate in a narrow range around the closing level of the previous day. From the low on February 6, when Stellantis securities were trading at €5.73 per share, by February 26, the company's shares have added almost 14% in Milan (worth about €6.5), but have not yet fully recovered all losses (before the collapse - traded in the range of €7-10 per share).

Stellantis' annual revenue fell 2% to €153.5 billion, pressured by currency effects and falling prices in the first half of 2025. However, the group's revenue started to grow in the second half of the year on the back of higher vehicle shipments, The Wall Street Journal noted. The automaker said it aims for mid-single-digit cash sales growth in 2026 and a return to positive operating margins, and expects to return to positive free cash flow (FCF) from operations in 2027.

The multibillion-dollar write-downs were painful for Stellantis, but gave the company a chance to start with a clean slate, wrote Berenberg analyst Romain Gourville. "Rebuilding Stellantis' earnings will take time," The Wall Street Journal quoted the expert as saying. - But [these write-downs] significantly reduce the risks to the earnings trajectory in the short term."

According to FactSet, analysts' sentiment toward Stellantis stock has improved over the past three months: the number of buy recommendations (Buy and Overweight) increased from seven to 13 due to a decrease in neutral ratings from 22 to 16, while the number of negative ratings (Sell and Underweight) remained unchanged (3). As a result, the consensus rating of Stellantis securities increased from "Hold" (Hold) to "Above Market" (Overweight). The average target price of Stellantis securities traded in New York calculated by the service at $9.65 per piece reflects the potential growth of quotations by 25%.

Since the announcement of multibillion-dollar write-downs on electric vehicle projects, Stellantis shares have lost about 20% of their value on the Milan Stock Exchange, and since the beginning of the year their decline has exceeded 30%. This is a general trend: together with similar impairment losses recorded by General Motors and Ford Motor, the total financial losses of the automotive sector due to the winding down of investments in electric vehicles in recent months exceeded $50 billion, states WSJ.

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