Stellantis Trails Its Rival on Key Metrics but Offers Compelling Upside for Patient Investors
Key Points
While a key rival's shares have surged 47% over the past year, automaker Stellantis has fallen nearly 47% lower.
Yet while weak results and dividend cuts justify this sell-off, shares could recover in a big way if the automaker's latest turnaround efforts prove effective.
Based on 2027 earnings forecasts, Stellantis, trading for just over $5 per share, could climb back to double-digit price levels.
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Stellantis (NYSE: STLA) is stuck in the stock market junkyard, especially when compared to key peer General Motors (NYSE: GM). While a series of negatives have pushed shares in the company behind car brands such as Chrysler, Dodge, Jeep, Ram, Peugeot, and Fiat down by 47% over the past year, shares in legacy competitor General Motors have surged by 47% over this same time frame.
Going contrarian doesn't always pay off, but in this situation, bottom-fishing with this hard-hit automotive stock could prove profitable -- at least, due to the low bar Stellantis needs to overcome to reach comeback territory.
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As its Detroit rival stays resilient, Stellantis struggles
Macroeconomic challenges such as inflation, interest rates, and tariffs affected automakers' profitability in 2025. Yet while General Motors experienced a 1.3% drop in sales and an over 48% drop in earnings per share (EPS) last year, these declines paled in comparison to what Stellantis reported for 2025.
For the full year 2025, Stellantis' revenue decreased by 2.1%. Even worse, Stellantis reported a massive swing in profitability. In 2024, Stellantis reported earnings of 5.5 billion euros ($6.3 billion), or 1.84 euros per share ($2.13 per share). In 2025, the company reported a loss of 22.4 billion euros ($25.6 billion), or a loss of 7.75 euros per share (-$8.86 per share).
In terms of dividends, the contrast between Stellantis and GM is on full display as well. Earlier this year, GM raised its quarterly cash dividend by 20%, from $0.15 to $0.18 per share. Meanwhile, in light of its poor 2025 fiscal performance, Stellantis suspended its dividend.
A silver lining for patient investors
Existing investors may regret holding onto Stellantis shares over the past year, but for those who have yet to buy, it may be a great long-term turnaround opportunity. So far this year, Stellantis' fiscal performance has started to improve. During Q1 2026, sales increased by 6.4%, and the company reported positive earnings of 0.14 euros per share ($0.16 per share), handily beating analyst expectations.
Moreover, with Antonio Filosa taking the helm last year, management is implementing a turnaround plan. Between cost-cutting, platform consolidation, and efforts to prioritize investment in its most popular brands, the company appears positioned to kick off an earnings recovery in 2026. Sell-side analysts already anticipate that Stellantis will report earnings of $0.85 and $1.76, respectively, during 2027 and 2028.
With the stock trading for just $5.30 per share today, achieving such earnings targets could drive a big recovery in the years ahead. As profitable automotive stocks like GM trade for 6 times forward earnings, one can argue that an earnings rebound over the next two years could propel Stellantis back to double-digit price levels. Even if it takes some time, it could prove worthwhile.
Given the high upside potential, Stellantis may offer greater upside than General Motors and Ford Motor Company, making it a stronger risk/reward opportunity among industrial stocks.
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Thomas Niel has no position in any of the stocks mentioned. The Motley Fool recommends General Motors and Stellantis. The Motley Fool has a disclosure policy.
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