Stellantis: Capitalizing on EV Momentum and Strategic Turnaround

The recent upgrade of Stellantis (STLA) by Berenberg from "Hold" to "Buy" has reignited investor interest in the beleaguered automaker. With a raised price target of €9.50, the firm's rationale hinges on a combination of strategic clarity, operational improvements, and valuation arbitrage. This analysis explores whether Stellantis's current discount to peers represents a compelling re-rating opportunity, particularly as the company navigates a complex transition to electric vehicles (EVs) and brand rationalization under new CEO Antonio Filosa.

Strategic Turnaround: From Breakeven to Breakthrough

Stellantis's first half of 2025 was a study in resilience. Despite a near-breakeven adjusted operating profit and a €3.3 billion write-down from cancelled programsStellantis Future Looks Positive After Capacity And …^[2], the company has signaled a pivot toward disciplined cost management and modular production. Berenberg's upgrade underscores the automaker's "strong scale and cost advantages," particularly its STLA modular platform, which reduces development costs and accelerates EV launchesBerenberg upgrades Stellantis stock rating to Buy on improving …^[1].

The strategic playbook under Filosa includes aggressive brand consolidation (e.g., phasing out underperforming models) and capacity adjustments to align with shifting demand. These moves, while painful in the short term, are critical to restoring profitability. As noted by Forbes, Stellantis's "capacity and brand cuts" position it to outperform peers in a sector grappling with overcapacity and margin compressionStellantis Future Looks Positive After Capacity And …^[2].

Valuation Re-Rating: A Discounted Opportunity

Stellantis's valuation metrics suggest it is trading at a significant discount to industry benchmarks. As of July 2025, the company's P/E ratio of 6.7xStellantis N.V. Financials: valuation metrics, financial reports, …^[3] lags the automobile manufacturers' industry average of 19.41xStellantis N.V. Financials: valuation metrics, financial reports, …^[3], while its EV/EBITDA of 2.5xStellantis Future Looks Positive After Capacity And …^[2] is far below the sector's 17.41xBerenberg upgrades Stellantis stock rating to Buy on improving …^[1]. Even more striking is its 2026 P/E of 5.3x, compared to a volume OEM peer average of 5.8xBerenberg upgrades Stellantis stock rating to Buy on improving …^[1]. These metrics imply that the market is pricing in a worst-case scenario, despite the company's structural advantages.

Berenberg's analysis highlights this mispricing as a catalyst for re-rating. The firm argues that Stellantis's "attractive valuation relative to peers" could drive a 10-15% upside if new model launches (e.g., the upcoming Jeep Avenger EV) restore volume growth and operating leverageBerenberg upgrades Stellantis stock rating to Buy on improving …^[1]. Meanwhile, the company's P/B ratio of 0.93xStellantis N.V. Financials: valuation metrics, financial reports, …^[3] suggests its tangible assets are undervalued, offering a floor for equity value.

Risks and Realities

No re-rating story is without caveats. Stellantis's recent €2.3 billion first-half lossStellantis Future Looks Positive After Capacity And …^[2] and Bernstein's lowered price targetBerenberg upgrades Stellantis stock rating to Buy on improving …^[1] reflect skepticism about its ability to execute. The EV transition remains capital-intensive, with rising battery costs and regulatory hurdles posing headwinds. Additionally, rebuilding investor trust will take time, particularly after years of underperformance and strategic missteps.

However, the company's $41 million investment in a U.S. Mopar Parts Distribution CenterBerenberg upgrades Stellantis stock rating to Buy on improving …^[1] and its focus on high-margin EVs signal a commitment to long-term value creation. If Stellantis can stabilize its cost base and deliver on its product roadmap, the current valuation discount could narrow significantly.

Conclusion: A Case for Cautious Optimism

Berenberg's upgrade is not a magic wand, but it does highlight a compelling risk/reward profile. Stellantis's strategic pivot, combined with its undervalued metrics, creates a scenario where a successful execution could drive a meaningful re-rating. For investors with a medium-term horizon, the stock offers exposure to a critical inflection point in the automotive industry's EV transition.

As always, the devil is in the execution. But in a sector where most automakers are struggling to adapt, Stellantis's disciplined approach and valuation discount make it a name worth watching.