4. Stellantis N.V. (NYSE:STLA)
Average Analyst Price Target Upside as of September 11: 46.19%
Number of Hedge Fund Holders: 31
Stellantis N.V. (NYSE:STLA) is making a strong push into the EV market with a clear plan to transform its lineup and production capabilities. It has introduced four global BEV-native platforms, STLA Small, Medium, Large, and Frame. Each of them is designed to accommodate various vehicle types from city cars to SUVs.
The STLA Large platform, which debuted in January, promises an impressive range of up to 800 kilometers (500 miles) and will support eight vehicle launches across five of the company’s brands, including Dodge and Jeep, from 2024 to 2026. By 2024, the company expects to have 48 BEVs available, with more planned in the following years.
Stellantis (NYSE:STLA) was held by 31 hedge funds in the second quarter and the stakes amounted to $300 million. Two Sigma Advisors is the top shareholder of the company and has a position worth $54.744 million as of Q2.
Stellantis (NYSE:STLA) is also expanding its manufacturing capabilities to support its electrification goals. In February, the company announced a €103 million investment to expand the production of electric drive modules (EDMs) at a new facility in Szentgotthard, Hungary, scheduled to begin operations in late 2026.
The new plant will supplement existing production sites in Tremery-Metz, France, Kokomo, Indiana, USA, and the Mirafiori complex in Italy, which is increasing its output of electrified dual-clutch transmissions (eDCTs) for hybrid and plug-in hybrid vehicles.
In addition to its BEV efforts, the company is ramping up its hybrid offerings, with plans to have 30 hybrid models available in Europe by 2024 and an additional six by 2026. It has already seen a 41% increase in hybrid sales in 2024 compared to the previous year, driven by its advanced eDCT technology. The company is focused on reducing CO2 emissions and improving fuel efficiency across its hybrid lineup, which includes popular models from brands like Jeep and Alfa Romeo.
Partnerships are also a key component of the company’s electrification strategy. Stellantis (NYSE:STLA) teamed up with NHOA Energy in 2023 to develop the Atlante fast-charging network in southern Europe.
The goal is to install 5,000 fast charge points by 2025 and over 35,000 by 2030. Additionally, the company is exploring dynamic wireless power transfer technology through the “Arena del Futuro” project in Italy, which aims to enable EVs to recharge while driving on specially equipped roads.
In September, the company made a significant move by announcing that it plans to invest over $406 million to expand its EV and hybrid production capabilities across three key facilities in Michigan.
The investment will be directed toward the Sterling Heights Assembly Plant (SHAP), Warren Truck Assembly Plant (WTAP), and Dundee Engine Plant (DEP), preparing these sites for the production of new vehicles and components. The investment highlights the company’s commitment to a multi-energy approach that includes electric, range-extended, and internal combustion engine (ICE) models.
Based on 26 analysts’ coverage, the stock has a consensus Buy rating. The average price target of $22.24 represents an upside of 46.19% from the current levels, as of September 11. It is one of the best EV stocks to buy for the long term.
Ariel Investments stated the following regarding Stellantis N.V. (NYSE:STLA) in its Q2 2024 investor letter:
“Finally, multinational automotive manufacturing company, Stellantis N.V. (NYSE:STLA), fell in the quarter as higher interest rates in the U.S. and tapering demand for high-volume combustion engine models resulted in elevated U.S. inventory levels. Nonetheless, pricing outperformed expectations and management reiterated full-year guidance of double-digit adjusted operating profit margin and positive free cash flow. Although we expect discounting to increase as U.S. inventory ages, we maintain a constructive view on the company. We believe STLA’s strong global footprint and unwavering dedication to leading the industry in profitability, operational excellence, and strategic foresight will continue to enhance long-term shareholder value.”
