Stellantis: A Turnaround Titan in North America's Automotive Arena?

The automotive world is littered with caution signs right now—soaring tariffs, EV overhype, and Wall Street's obsession with “peak everything.” But here's the thing: When the market is trembling, that's when you look for companies that are building, not crumbling. Stellantis (STLA) is one such stock—its North American operations are in the early stages of a turnaround that could make it a rare cyclical winner. Let's dig in.

The North American Turnaround: A Rocky Start, But Momentum Is Brewing

Stellantis' Q1 2025 results were a mixed bag. Shipments in North America fell 20% year-over-year, and revenue dropped 25% to €14.4 billion, thanks to tariff-driven production gaps and inventory adjustments. But here's the key: retail order momentum is roaring. U.S. new retail orders surged 82% in March—the highest since mid-2023—and critical brands like Jeep and Ram are firing on all cylinders.

The Ram Renaissance: Why This Brand Could Be Stellantis's Secret Weapon

The Ram brand is the unsung hero here. The Ram 1500 saw 14% retail sales growth, while the Heavy Duty trucks (2500/3500) jumped 18%. Even the Ram ProMaster van skyrocketed 148%—a sign that Stellantis is reclaiming commercial truck dominance. CEO Antonio Filosa's focus on localization (shifting production to the U.S. to dodge tariffs) is already bearing fruit. With the V-8 engine revival in the Ram 1500 and the upcoming Ram ProMaster EV, this brand is primed to steal market share from Ford and GM.

Strategic Partnerships: AI, China, and Electrification

Stellantis isn't just playing defense. It's making bold bets on the future:
- AI in the cockpit: Partnering with Mistral AI to create in-car assistants that could redefine driver experience.
- EV scaling: The STLA AutoDrive 1.0 (hands-free driving) and multi-energy platforms are critical for meeting U.S. EV mandates.
- Chinese collaboration: Joint ventures with Chinese automakers could cut costs and speed up global EV rollout—a move that could save billions.

The Tariff Wild Card: Can Stellantis Navigate the Storm?

The 25% U.S. tariff on imported vehicles is a double-edged sword. Analysts estimate tariffs could cost Stellantis €1 billion in North America this year—a stark reversal from earlier profit expectations. But here's the twist: The Biden administration's recent tariff offsets (reducing levies on Mexico-made vehicles until 2027) give Stellantis a lifeline. If it can accelerate U.S. reshoring and stabilize margins, this stock could snap back.

Why Now? Three Signs of a Turnaround Taking Hold

1. Jeep's electrified revival: The Grand Cherokee 4xe (23% of sales) and Wagoneer S (2,595 units sold in Q1) are proving there's demand for hybrid off-road prowess.
2. Market share gains: In Europe, Stellantis jumped to 17.3% market share—a 1.9-point jump—thanks to hits like the Citroën C3/ëC3. This cash flow could fund North American recovery.
3. CEO Filosa's hands-on strategy: His focus on cutting dealer inventory, boosting production efficiency, and leveraging iconic brands (Jeep, Ram) is textbook Cramer-level execution.

Investment Thesis: Buy the Dip, but Watch the Tariffs

Stellantis is a cyclical play with a 75% upside potential if tariffs ease and its North American turnaround accelerates. The stock is trading at a deep discount to peers (P/E of ~5 vs. GM's 12), and its €0.68 dividend (if maintained) adds a safety net.

Action Alert!
- Buy if STLA dips below €12: That's a 20% discount to its 52-week high and a bargain given its brand power.
- Set a target of €18-€20: Achievable if tariff fears fade and Ram/Jeep sales hit 2026 estimates.
- Avoid if U.S. reshoring delays: A failure to reduce tariff exposure could sink margins further.

Final Word: A Risky, But Rewarding, Gamble

Stellantis isn't for the faint-hearted. It's got $34 billion in debt, razor-thin margins, and a CEO still proving his mettle. But when you've got 82% order growth, iconic brands, and a plan to localize production, this is the kind of stock that could turn skeptics into believers. This is a must-watch for contrarians—buy the dips, and hold onto your seatbelt.

—The Mad Strategist