Key Takeaways
- HSBC has lowered Stellantis to a “Reduce” rating from “Hold,” trimming the price objective to €4 from €5.50—suggesting a potential 21.8% decline
- American inventory reached 93 days’ supply in June 2026, marking a 120,000-unit increase versus the prior year and approaching 2024’s elevated levels
- The automaker has announced 19 separate recalls in the United States during 2026, affecting 2.5 million vehicles
- HSBC reduced its 2026 adjusted operating profit projection by 59% to €1.52 billion, pointing to a mere 1% operating margin
- The investment bank questions whether a durable profit turnaround is achievable for the carmaker
Shares of Stellantis declined during Thursday’s Paris session following a report from HSBC analyst Michael Tyndall, who lowered his recommendation on the automaker to “Reduce” from “Hold” while slashing the price objective to €4 from €5.50. With the stock hovering near €5.11 at the July 2 market close, this revised target represents approximately 21.8% downside risk.
The rating cut stemmed from two primary issues: escalating inventory accumulation in the United States and a growing wave of product recalls.
According to HSBC’s analysis, Stellantis’ American inventory climbed to 93 days of supply during June 2026, representing a 120,000-vehicle jump from the same month last year. This metric is edging closer to the approximately 100-day threshold reached during 2024’s inventory crisis.
“We do not understand the logic of repeating past failures,” the HSBC note said.
When confronted with excess inventory in 2024, Stellantis was compelled to slash American pricing by 500 to 600 basis points while curtailing production by approximately 200,000 units. HSBC suggests the company may face a comparable correction cycle ahead.
Quality Issues Mounting
Regarding product quality, HSBC referenced National Highway Traffic Safety Administration records indicating Stellantis initiated 19 American recalls encompassing 2.5 million vehicles through the first half of 2026. Roughly 2 million of these units necessitate hands-on inspection or mechanical fixes.
Throughout the entirety of 2025, the manufacturer recorded 53 domestic recalls impacting 2.8 million vehicles.
Across the Atlantic, Stellantis documented 47 recalls during the opening six months of 2026, nearly matching the 48 recalls issued throughout all of 2025. Meanwhile, every other major European Union automaker collectively registered just 45 recalls during that same initial half-year window.
Profit Projections Slashed Dramatically
HSBC trimmed its 2026 adjusted operating profit estimate by 59%, bringing it down to €1.52 billion. This calculation suggests a 1% operating margin, falling short of the company’s stated expectation for “low single digit” margins.
The firm’s 2026 industrial free cash flow prediction plummeted 50% to a negative €4.89 billion.
HSBC further questioned whether the manufacturer’s traditionally robust margins might indicate insufficient capital expenditure. The analyst suggested Stellantis “may need to invest more to reach a sustainable recovery.”
The company currently trades at a 12-month forward price-to-earnings multiple of 5.6 times, representing a 32% markdown compared to the 8.2-times global peer average. Historically, the three-year average discount has hovered around 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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