Stellantis stock price continued its downward trend, reaching its lowest level since September 2020. It has tumbled from a record high of $25 in 2024 to a low of $7.25. This retreat has brought its market cap from an all-time high of $91 billion to the current $20 billion. It has also formed a head-and-shoulders pattern, pointing to more downside.
Stellantis announces a €22 billion writedown
Stellantis, the parent company of Jeep, Chrysler, Dodge, and Fiat, has come under intense pressure in the past few years. This performance was attributed to its attempts to become a major player in the electric vehicle (EV) industry.
The company has also suffered from many years of underinvestment in its brands, including Chrysler, Maserati, and Jeep. As a result, the management announced a big €22 billion charge, joining other companies like Ford, Porsche, and General Motors.
The company also announced other strategies to reboot its business. It announced a $13 billion in its US business, which will see it launch five additional vehicles, including Dodge Charger, Fiat Grande Panda, Jeep Cherokee, and HEMI.
Stellantis also announced that it cancelled products it believes it will be unable to achieve profitability at scale. For example, it cancelled the planned Ram 1500 battery electric vehicle (BEV).
The company’s challenge shed more light on how automakers failed in their transition to electric vehicles. This transition happened as these companies copied Tesla, a company that came from nowhere to become the biggest automaker in the world.
Additionally, the transition was because of policymakers in the United States and Europe. These policymakers launched policies that pushed automakers to focus on EVs in a bid to lower their emissions.
Stellantis has now become a bargain
Last Friday’s panic-selling means that the company may have now become a bargain as its shipments have been steady. The most recent results showed that the company’s deliveries continued rising in the fourth quarter.
Stellantis’ shipments rose by 9% YoY to 1.52 million. Most of this growth came from North America, where its sales surged to over 663k, up by 43%. Its Middle East and Africa, China, and South American business continued improving.
Wall Street analysts expect that the upcoming results will show that its annual revenue slipped by 2.3% in 2025 to €153 billion. They expect that its revenue will be €161 billion, up by 5.4%. Also, its EPS will grow from €0.81 to €1.74.
Therefore, there is a likelihood that the stock will remain under pressure in the near term and then rebound later this year as the turnaround strategy continues.
Stellantis stock price technical analysis
The weekly chart shows that the STLA stock has been in a strong downtrend in the past few years. It has moved from a record high of $25.4 in 2024 to the current $7.25. It retreated below the key support at $7.75, its lowest level in April last year.
The stock also retreated below the key support at $9, the neckline of the head-and-shoulders pattern. A H&S is one of the most bearish signs in technical analysis.
The shares have moved below all moving averages and the 78.6% Fibonacci Retracement level. Therefore, the stock will likely continue falling, potentially to the psychological level at $5. It will then bounce back eventually as investors buy the dip.
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