Stellantis stock jumps on strong financials but bottom outlook remains bearish
The action of the world’s number 4 automobile jumped more than 2% on Monday thanks to the publication of the group’s record results in the first half. The Stellantis Group posted record sales of 88 billion euros and managed to achieve Tesla-like margins of 14% thanks to cost reduction and a higher share of electric vehicle sales, more profitable than thermal vehicles. The multi-brand manufacturer thus generated an operating profit of 12.4 billion euros and a net profit of 8 billion.
Strong results from Stellantis over the weekend allow the stock to extend its gains of the past two weeks, but the underlying outlook remains bearish. Indeed, although the renewed appetite for risk could allow the stock to prolong its short-term gains, the deterioration in the economic outlook will continue to weigh on the underlying trend. Macro deterioration is the main driver for Stellantis stock and other auto groups and is likely to keep the auto sector under pressure in the coming months.
The publications of manufacturing PMIs for the month of July confirm the slowdown in the European economy this morning and the publication of the ISM manufacturing index this afternoon should do the same for the United States. Stellantis’ fundamental outlook will improve when the global economic outlook improves, which seems unlikely as long as central banks tighten monetary policies and China enforces strict health restrictions.
Stellantis (STLA) stock price daily chart – key levels