(CercleFinance.com) – The Stellantis share rose by nearly 2.3% on Wednesday, the day after the presentation of the European automotive group’s strategic plan. In the aftermath, several analysts confirmed their buying advice.
UBS reaffirmed its buy recommendation, with a view to a target price of 25 euros, representing an estimated upside potential of 53% for the title of the car manufacturer resulting from the merger between Peugeot-Citroën and Fiat Chrysler. The design office makes a solid case for the objective of doubling Ebit (operating income) by 2030, while transforming into an “all-weather” company, which should result in an expansion of the multiples of valuation. However, the expected returns in terms of free cash flow are hardly impressive, tempers UBS.
Invest Securities also maintains its buy opinion on Stellantis and raises its target price from 28 to 30 euros, despite the situation in Europe, considering that “the current drop provides an entry point for the most contrarian investors” . The day after the presentation of the 2030 plan and a week after the publication of the 2021 results, the consultancy firm raised its net profit projections for the 2022 to 2024 financial years by 19%, 11% and 13% respectively. “The war in Ukraine has not changed the short and long-term guidance, which greatly exceeds our assumptions with average guided growth of +12% and 2030 sales landing at more than 300 million euros”, notes the analyst.
The financial elements presented suggest a trajectory that is the opposite of that suggested by the current multiples with, in particular, a very ambitious manufacturer in terms of growth (turnover x2 by 2030) and durably anchored in double-digit profitability” indicates Oddo BHF for its part. The analyst explains that the strategic plan has reinforced his very positive opinion of Stellantis (target price of 30 euros) which remains his favorite value in the sector. “Among the main strategic elements presented, we let us retain 1/ a sharp acceleration in electrification with a BE 2030 mix target of 100% in Europe and 50% in the United States; 2/ a more balanced geographical mix (revenue outside Europe and China at nearly 30% of the group compared to 15% today); 3/ a more balanced product positioning, in particular to the benefit of premium/luxury which should represent 11% of sales in 2030 against 4% today”. much higher than those of volumes thanks to the mix, prices and new profit pools) with a turnover of 200 MdE in 2024 and 300 MdE in 2030; 2/ an adjusted EBIT margin constantly in double digits and even >12% in 2030, objectives that we consider prudent compared to those communicated for the regions (>15% NAFTA, >10% in Europe, etc.); 3/ an FCF of >6 MdE in 2024 (negative impact of 3 MdE on WCR linked to the desire to structurally reduce the volatility of the balance sheet, a historical reproach), >10 MdE in 2027 and >20 MdE in 2030 (Capex/ R&D stable over the period at ~8% of sales)” adds Oddo.
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