Top 10 Luxury Stocks According to Analysts

6. Stellantis N.V. (NYSE:STLA)

Average Price Target Upside as of August 5: 51.5%

Number of Hedge Fund Holders: 35

Stellantis N.V. (NYSE:STLA) is a leading global automotive manufacturer that operates several well-known luxury vehicle brands such as Alfa Romeo, Chrysler, DS, and Maserati. The company sells its cars in over 130 countries and has manufacturing facilities in around 30 countries.

It is one of the largest and fastest-growing automotive brands in the world. Stellantis (NYSE:STLA) is committed to innovation and growth, especially through its ambitious electrification strategy and expansion of its product offerings. In Q1, 35 hedge funds had a stake worth $556.400 million in the company.

Even though the latest Q2 earnings were considered a little disappointing by experts and “humbling” according to the company’s management, Stellantis (NYSE:STLA) acknowledged its issues and is working to improve them.

The company’s adjusted operating income (AOI) margin fell to 10%, down from a record 14.4% in the previous year, and industrial free cash flow was negative EUR0.4 billion. The drop in AOI margin reflects higher manufacturing costs and lower volumes, while negative free cash flow was impacted by increased investment spending and working capital fluctuations.

Management is confident in a return to positive free cash flow by the end of the year, with plans to reduce investment spending by at least EUR1 billion in the second half.

On July 31, Nomura analyst Anindya Das upgraded Stellantis (NYSE:STLA) to a Buy rating from Neutral, adjusting the price target from EUR 24 to EUR 21. The upgrade is based on a positive assessment of company management’s commitment to addressing ongoing challenges in North America.

The analyst highlighted that Stellantis (NYSE:STLA) has made significant investments in the first half of 2024. These investments are aimed at launching a series of cost-effective new products in Europe. This strategic move is expected to position Stellantis (NYSE:STLA) more favorably to navigate headwinds from slower sales growth in the European market.

Moreover, the analyst noted that the company’s current share price presents an attractive valuation, which is further supported by a strong dividend yield of 10%. This yield offers a compelling incentive for investors, further supporting the Buy recommendation.

As of August 5, Stellantis (NYSE:STLA) has a consensus Buy rating among 27 analysts. The average price target of $23.84 represents a nearly 51.5% upside to its stock price at current levels.