Stellantis Stock Has Massive Upside, but Q3 U.S. Sales Tell a Bittersweet Story

We have great people, global scale, unmatched brands, deep regional roots and strong dealer partnerships. Combined with innovation, execution and win-win partnerships, those strengths position us to deliver on our FaSTLAne 2030 ambitions -- moving people with brands and products they love and trust.

That was Stellantis (NYSE: STLA) CEO Antonio Filosa earlier this year discussing the massive $70 billion turnaround strategy for the beleaguered automaker as part of its Fastlane 2030 strategy. Fortunately, the turnaround plan, by all accounts, seems solid and checks a lot of boxes, including creating a stronger identity with four core brands receiving the bulk of investment, attacking pent-up demand for affordable vehicles, and significantly shortening its vehicle development time.

That said, you can't turn around a massive global automaker overnight, and Stellantis' third-quarter U.S. sales -- which remain its profit engine -- were bittersweet, with Ram surging while Jeep reversed. In fact, Ram outsold Jeep for the first time ever -- or since Ram was separated from Dodge in 2009 -- during Q3.

Image source: Stellantis.

By the numbers

Starting from the top, Stellantis' year-to-date sales volume moved 3% higher compared to the prior year and remained roughly flat for Q3, specifically. What investors will want to focus on over the next couple of years is the growth of its Jeep and Ram brands in North America and globally.

Looking more closely at Stellantis' bittersweet Q3 U.S. sales, the biggest bright spot was the automaker's Ram 1500 light-duty pickup, which posted a staggering 73% sales gain compared to the prior year. That helped drive its total pickup sales up 34% during Q3 and its total Ram brand sales up 29%. Another bright spot for the future was that orders opened for the company's 2027 Ram 1500 Rumble Bee 5.7L, with its initial allocation for the 2026 calendar year selling out in just 90 minutes.

Ram was the sweet part of the equation, but Jeep, also an incredibly important brand for the company's global sales volume and North American bottom line, was a little bitter for investors. Jeep Q3 sales volume declined 20%, largely driven by slower sales of the Compass and Grand Cherokee models.

Massive upside for Stellantis stock

Both brands will be cornerstones of a potentially massive turnaround and represent half of the core four brands the automaker is heavily investing into, with Stellantis' market capitalization now sitting far below rivals.

Data by YCharts.

This graph is certainly worth a thousand words. It shows how drastically Stellantis has fallen and been sold off over the past three years, going from a market cap approaching $90 billion in early 2024, ahead of rivals Ford Motor Company (NYSE: F) and General Motors (NYSE: GM), to having a market cap of only about $12 billion and even lower than electric vehicle (EV) maker Rivian (NASDAQ: RIVN) that sells a small fraction of EVs only and unprofitably.

What it all means

While Stellantis' Ram brand appears to be gaining traction already, investors can at least hold out hope for the automaker's plans for Jeep going forward. One reason the previously mentioned Compass experienced a sales slowdown was a roughly $4,000 price increase over the past two years, which pushed it above $31,000 and essentially erased its entry-level positioning.

That said, Stellantis is focusing on more affordable pricing for Jeep, expanding manufacturing by investing $600 million to reopen its Belvidere Assembly plant by 2027, and increasing powertrain options. Stellantis is expanding the number of Jeep nameplates from 10 to 13, including the new Wagoneer S EV, a Wrangler-inspired Recon EV, and bringing back the sorely missed midsize Jeep Cherokee. The automaker is also expanding powertrain choices from 18 to 27 options as it attempts to find a balance between more profitable combustion engine vehicles, hybrids, and pure EVs.

Ultimately, Jeep and Ram are going to be absolutely crucial for Stellantis to gain traction on its turnaround plans as well as its targets to improve revenue, sales volume, production capacity utilization, and, of course, operating margins. Q3 showed that Ram has immediate potential, but this massive turnaround will also take time. For patient investors willing to take risks, Stellantis has the right plan to turn the business around by 2030, but they should understand that there are many things to fix, and execution isn't guaranteed.

Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool recommends General Motors and Stellantis. The Motley Fool has a disclosure policy.