Stellantis Earnings Preview: Big 3 Automaker Aims to Bounce Back in 2025

As Stellantis N.V. (NYSE: STLA) prepares to report its full-year 2024 results on February 26, investors are eager to see how the world's fourth-largest automaker plans to put a challenging year behind it and drive growth in 2025. The company, which owns iconic brands like Jeep, Ram, and Peugeot, has faced headwinds in 2024, including inventory reduction actions and increased incentives, which have impacted its financial performance.

Stellantis' inventory reduction actions and increased incentives have had a significant impact on its financial performance in 2024. The company accelerated its planned normalization of inventory levels in the U.S., targeting no more than 330,000 units of dealer inventory by year-end 2024. This action, along with increased incentives on 2024 and older model year vehicles, and productivity improvement initiatives, led to North American shipment declines of more than 200,000 vehicles in the second half of 2024 compared to the prior year period.

As a result of these actions, Stellantis revised its 2024 financial guidance. The company now expects its adjusted operating income (AOI) margin to be between 5.5% and 7.0% for the FY 2024 period, down from its previous "double-digit" target. Additionally, industrial free cash flow is expected to range from -€5 billion to -€10 billion, from its prior "positive" outlook. This primarily reflects the substantially lower AOI outlook and the impact of temporarily elevated working capital in the second half of 2024.

Despite these challenges, Stellantis believes that the recovery actions being put in place will ensure stronger operational and financial performance in 2025 and beyond. The company is leveraging and expanding its competitive differentiators to achieve this goal. Stellantis' strategic plan, Dare Forward 2030, has contributed to its financial performance in 2024 by setting ambitious targets for the company to achieve carbon net zero by 2038 and be second to none in value creation for all stakeholders.

In 2025, Stellantis is expected to have a stronger operational and financial performance as a result of the recovery actions being put in place. The company's corporate calendar for 2025 includes the following key dates:

* April 30, 2025: Q1 2025 Shipments and Revenues
* July 24, 2025: First Half 2025 Results
* October 30, 2025: Q3 2025 Shipments and Revenues

The company's Annual General Meeting for the approval of Stellantis N.V.'s 2024 financial statements is scheduled for April 15, 2025. The 2025 corporate calendar is available on the Stellantis corporate website at www.stellantis.com.

In conclusion, Stellantis has faced challenges in 2024, but the company is well-positioned to bounce back in 2025. With its strategic plan, Dare Forward 2030, and the recovery actions being put in place, Stellantis is poised to deliver stronger operational and financial performance in the coming years. Investors should keep a close eye on the company's earnings reports and corporate calendar to stay informed about its progress.