Morgan Stanley Downgrades Stellantis to Underweight Amid Concerns Over Product Pipeline
Stellantis (NYSE:STLA) shares fell more than 2% after Morgan Stanley downgraded the stock from Equal Weight to Underweight, reducing its price target to $5.20 from $8.00. The downgrade was part of a broader review by analysts led by Javier Martinez de Olcoz Cerdan and came amid concerns over Stellantis' inventory management, incentives strategy, and lagging product pipeline compared to peers. Morgan Stanley noted that the company's ability to reduce investment may be limited as cash generation declines. The firm also highlighted a wide risk/reward skew for Stellantis due to potential refinancing risks or changes in trade agreements like USMCA. In contrast, Renault was upgraded from Underweight to Equal Weight with an increased price target of €31. The bank maintained Overweight ratings on Mercedes-Benz and BMW while raising their respective price targets slightly. Morgan Stanley also raised its 2026 and 2027 estimates for the European automotive sector, citing improved cost management and restructuring efforts.
Tickers: $STLA
Topics: automotive Morgan Stanley stock downgrade