Key Takeaways
- HSBC has moved Stellantis to a “Reduce” rating from “Hold,” lowering the price objective to €4 from €5.50—suggesting 21.8% potential decline
- American inventory levels reached 93 days of supply in June 2026, climbing by 120,000 units versus the prior year and approaching 2024’s elevated thresholds
- The automaker has announced 19 separate U.S. recalls affecting 2.5 million vehicles during 2026 thus far
- HSBC reduced its 2026 adjusted operating income projection by 59% to €1.52 billion, suggesting a mere 1% operating margin
- The investment firm expresses doubt about any durable profitability turnaround for the carmaker
Shares of Stellantis declined during Thursday’s Paris session following HSBC analyst Michael Tyndall’s decision to downgrade the manufacturer to “Reduce” from “Hold,” while simultaneously reducing the price objective to €4 from €5.50. With the stock closing around €5.11 on July 2, the revised target represents approximately 21.8% downside potential.
Tyndall’s rating cut stems primarily from two critical issues: escalating inventory stockpiles in the United States and a growing number of product recalls.
According to HSBC’s research, Stellantis’ American inventory reached 93 days’ worth of sales during June 2026, representing a year-over-year increase of 120,000 vehicles. This metric is nearing the approximately 100-day threshold recorded at the 2024 peak.
“We do not understand the logic of repeating past failures,” the HSBC note said.
During the 2024 inventory correction, Stellantis implemented U.S. price reductions of 500 to 600 basis points while curtailing production by approximately 200,000 units. HSBC cautions that a comparable scenario may be on the horizon.
Quality Concerns Mount
Regarding product quality, HSBC referenced NHTSA records indicating Stellantis initiated 19 separate U.S. recalls encompassing 2.5 million vehicles through the first half of 2026. Roughly 2 million of these affected vehicles necessitate physical examination or mechanical fixes.
Throughout the entirety of 2025, the corporation issued 53 American recalls impacting 2.8 million vehicles.
Across Europe, Stellantis documented 47 recalls during the initial six months of 2026, versus 48 throughout the complete 2025 calendar year. By comparison, all remaining major European Union automakers collectively registered 45 recalls during that identical half-year timeframe.
Profit Projections Slashed Dramatically
HSBC trimmed its 2026 adjusted operating income expectation by 59%, bringing it down to €1.52 billion. This calculation points to a 1% margin, falling short of the company’s stated guidance for “low single digit” profitability.
The brokerage’s 2026 industrial free cash flow projection fell 50% to a negative €4.89 billion.
HSBC additionally raised concerns about whether the manufacturer’s historically robust margins indicate insufficient investment. The firm suggested Stellantis “may need to invest more to reach a sustainable recovery.”
Stellantis currently commands a 12-month forward price-to-earnings multiple of 5.6 times, representing a 32% markdown compared to the global peer group average of 8.2 times. The three-year historical discount has typically hovered near 40%.
HSBC acknowledged some signs of U.S. market share stabilisation but called June 2026 results “mixed.” The broker’s bottom line: “We’re not convinced a sustainable recovery is underway.”
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
