Trading idea: Stellantis (STLA-IT)
Stellantis is a € 55.5 Bn market cap company and a major European automotive manufacturer. Following the merger-absorption of Peugeot S.A. in January 2021, Fiat Chrysler Automobiles N.V. changed its name to Stellantis N.V. The new group is one of the world's leading car manufacturers. The activity is organized mainly around 4 poles including :
1/ sale of passenger and utility vehicles: Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Peugeot, Citroën, Opel, Vauxhall, Fiat Professional, Jeep, Lancia, Ram and SRT brands;
2/ sale of luxury vehicles: Maserati and DS Automobiles brands;
3/ sale of automotive equipment: interior systems, automotive seats, automotive exteriors, emission control systems, etc. ;
4/ other: sales financing services (purchase, rental, leasing, etc.), after-sales services, etc.
Accelerated entry into the EV sector should bring beneficial catalysts going forward for STLA as they plan to launch 10 additional "high voltage" models in 2021. The company also has plans to make moves in the hydrogen fuel and autonomous driving spaces as well going forward. These unique presences along with fresh mobile software should drive growth for the foreseeable future.
Stellantis expect to reach a 10% operating margin in 2021 coupled with a 10% revenue growth. EPS growth are expected to reach double digit in the next following years. The balance sheet is strong and the dividend yield stand at 5.4%.
Short term catalyst : EV transition acceleration, double digit opeating margin.
This signal looks consistent with the major bullish trend in the European Automotive sector. There is currently 67% of European Automotive stocks in Tactical Signal and 33% in Strategic Signal.