TLDR
- HSBC downgraded Stellantis to “Reduce” from “Hold” and cut its price target to €4 from €5.50, implying 21.8% downside
- U.S. inventory hit 93 selling days in June 2026, up 120,000 units year-on-year, nearing 2024 peak levels
- Stellantis has issued 19 recalls covering 2.5 million vehicles in the U.S. year-to-date in 2026
- HSBC slashed its 2026 adjusted operating income forecast by 59% to €1.52 billion, implying a 1% margin
- The broker does not see a sustainable earnings recovery for the automaker
Stellantis stock fell in Paris trading on Thursday after HSBC analyst Michael Tyndall downgraded the automaker to “Reduce” from “Hold,” cutting his price target to €4 from €5.50. The stock was trading around €5.11 at the July 2 close, putting the new target roughly 21.8% below that level.
The downgrade was driven by two main concerns: rising U.S. inventory and an increasing number of vehicle recalls.
HSBC flagged that Stellantis’ U.S. inventory stood at 93 selling days in June 2026, up 120,000 units compared to a year ago. That figure is approaching the roughly 100-day peak hit in 2024.
“We do not understand the logic of repeating past failures,” the HSBC note said.
To clear inventory in 2024, Stellantis had to cut U.S. prices by 500 to 600 basis points and reduce production by around 200,000 units. HSBC warned a similar episode could be coming.
Recalls Piling Up
On the quality side, HSBC pointed to NHTSA data showing Stellantis issued 19 U.S. recalls covering 2.5 million vehicles year-to-date in 2026. Around 2 million of those require physical inspection or mechanical repair.
For all of 2025, the company logged 53 U.S. recalls affecting 2.8 million vehicles.
In Europe, Stellantis recorded 47 recalls in just the first half of 2026, compared to 48 for the full year of 2025. By contrast, all other major EU automakers combined logged 45 recalls over the same first-half period.
Earnings Outlook Cut Sharply
HSBC cut its 2026 adjusted operating income forecast by 59%, down to €1.52 billion. That implies a 1% margin, below the company’s own guidance for a “low single digit” margin.
The broker’s 2026 industrial free cash flow estimate dropped 50% to negative €4.89 billion.
HSBC also questioned whether the company’s historically high margins reflect a lack of investment. The broker said Stellantis “may need to invest more to reach a sustainable recovery.”
Stellantis trades at a 12-month forward price-to-earnings ratio of 5.6 times, a 32% discount to the global peer average of 8.2 times. The three-year average discount has been closer to 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.”
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