Berenberg cuts Stellantis stock rating on margin concerns

Berenberg recently cut its rating for Stellantis stock, moving it from Buy to Hold, and lowered its price target from EUR7.80 to EUR5.10. This change comes after the firm noted concerns about the company's margins, particularly in the second quarter. Stellantis, currently trading at $5.08, has seen a 53% drop year-to-date and operates with a gross profit margin of only 6.55% over the past year.

The downgrade is mainly due to weak operating leverage in North America, where margin improvements have been slower compared to the recovery in volumes. Berenberg's assessment raises questions about Stellantis' margin trajectory in the second half of the year, especially as inventory destocking could negatively impact volumes. Despite this, management highlights positive aspects such as improving pricing in North America, stabilizing pricing in Europe, and increased cost savings.

The firm has also reduced its 2026-28 operating profit estimates by around 15%, taking into account intensifying headwinds from raw material costs and competitive pressures, particularly in Europe.