On Monday, Stellantis NV (NYSE:STLA), a $34.77 billion automotive giant with strong financial health according to InvestingPro, confirmed the immediate departure of CEO Carlos Tavares, an event that was previously reported by Bloomberg on Sunday. The company, which had previously announced in October the initiation of a search for Tavares' successor, stated that Tavares had intended to remain in his role until early 2026.
Following his unexpected exit, Stellantis' leadership will be temporarily overseen by an interim committee headed by Chairman John Elkann, with the appointment of a new CEO slated for the first half of 2025.
The company's board convened on Sunday to address the leadership change, prompted by what Stellantis senior independent board director Henri de Castries described as "different views" that have surfaced in recent weeks. This transition comes after Stellantis revised its 2024 guidance two months prior, on September 30, with significant adjustments.
Despite the confirmation of this guidance and the company's attractive P/E ratio of 2.54, questions arise regarding the board's decision to operate without a permanent CEO for an extended period instead of maintaining the current leadership. InvestingPro analysis suggests the stock is currently undervalued, with 12 additional key insights available to subscribers.
Bernstein SocGen Group has reiterated a Market Perform rating on Stellantis, maintaining a price target of $12.10 for the automaker's shares. The firm anticipates that the stock may face downward pressure as markets open on December 2, given the challenges of presenting these developments in a positive light for the stock price. The stock has already experienced a significant 40.73% decline over the past six months, though it maintains a notable 9.2% dividend yield.
The interim committee's leadership and the forthcoming search for a new CEO will be closely monitored by investors and industry observers alike.
In other recent news, Stellantis N.V. (NYSE:STLA) has seen a significant decline in its third-quarter shipments and revenues, with a 20% drop in shipments to 1.15 million units and a 27% decrease in revenues to €33 billion.
The automotive giant has outlined a multi-year product transition and a new partnership with Leapmotor (HK:9863) to improve profitability and market adaptability. Stellantis is also contending with potential tariffs proposed by the Trump administration, which could cost carmakers up to 17% of their combined annual EBITDA in a worst-case scenario according to S&P Global.
Stellantis and Infineon Technologies AG (OTC:IFNNY) have announced a collaboration aimed at enhancing power conversion and distribution in electric vehicles. The partnership includes significant supply and capacity agreements for Infineon's PROFET™ smart power switches and silicon carbide (SiC) CoolSiC™ semiconductors. Stellantis has also been rated "In Line" by Evercore ISI with a price target of €13.00, based on a multiple of 4 times the company's projected 2026 GAAP adjusted earnings per share.
These developments reflect the ongoing changes and challenges within the global automotive industry, with Stellantis playing a significant role. The company's position and strategy are likely to influence the overall industry, including OEMs and suppliers.
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