Stellantis Plans an Epic 2025 Comeback. Is the Stock a Buy?

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To attempt a significant comeback after losing about half its value since March 2024, it could benefit risk-taking investors if it's successful. The automaker, which owns brands such as Ram, Jeep, and Alfa Romeo, sells at a low price-to-earnings ratio, faces concerns about potential tariff impacts, and needs to repair its relationship with its network of dealerships.

Let's take a closer look at the tasks ahead for Stellantis and what it'll need to accomplish for a monumental recovery.

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Change of plans

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Keep an eye on us throughout the entire year. You'll start to notice steady improvements, you'll see progress pick up speed, and you'll see sales start to increase. The dealers are on our side, and we're working together to regain their trust and confidence. Unfortunately, 2024 was not the year any of us were hoping for.

Stellantis has a lot of plans for 2025. The company intends to investigate opportunities for new powertrains, reenter certain markets it had previously abandoned, position its products in a more competitive light, and focus on enhancing vehicle quality. Along with that, the company will be launching an advertising effort to drive demand.

In a move that reflects its commitment to expansion in the US, French multinational automotive corporation Stellantis plans to invest over $5 billion to boost its US manufacturing capabilities. This move comes as an attempt to strengthen ties with US President Donald Trump. Specifically, Stellantis is investing $1.2 billion in its Belvidere, Illinois assembly plant to produce a new midsize pick-up truck and putting additional investments into its Detroit plant, which will manufacture a new Dodge car. It's also investing in its Toledo site, where Jeep trucks are produced, among other initiatives.

Another goal Stellantis recently completed to aid in its comeback was reducing its U.S. inventory by more than 100,000 vehicles late last year. Cutting down its excessive vehicle stock helps alleviate pressure on dealerships, which were previously required to offer large discounts and other incentives that erode their profits.

Before investors can dream about all those plans driving an epic comeback, they also have to think about the uncertainty surrounding Stellantis.

Should investors buy in?

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According to a report from S&P Global, European and American automakers risk losing up to 17% of their total annual core profits if the U.S. imposes tariffs on imports from Europe, Mexico, and Canada, with Stellantis placing among the most vulnerable to tariff-related issues.

It's also fair to note that all the negative outlook seems factored into the company's valuation, as evidenced by Stellantis lagging significantly behind its peers in stock value.

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Should you put a $1,000 investment in Stellantis at this time?

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*The Stock Advisor report is current as of January 27, 2025

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