**Automaker Stellantis Slumps as Revised Guidance Sparks Industry-Wide Sell-Off**
Stellantis NV’s stock plummeted on Monday after the company revised its fiscal 2024 guidance, citing remediation efforts to address performance issues in North America and deteriorating global industry trends. The ripple effect was felt across the automotive sector, with rivals General Motors Co and Ford Motor Co also trading lower.
The revised guidance projects an adjusted operating margin of 5.5%-7.0% for fiscal 2024, a significant downgrade from earlier double-digit growth expectations. Industrial free cash flow is now expected to be in the range of -€5 billion to -€10 billion, a stark contrast to previous positive cash flow projections.
In response to the challenges, Stellantis aims to reduce dealer inventory in the US to 330,000 units by the end of 2024, earlier than its initial target of Q1 2025. The company’s remediation efforts include reducing North American shipments by over 200,000 vehicles in the second half of 2024, increasing incentives on older model-year vehicles, and implementing productivity improvement initiatives.
The company’s struggles were evident in its Q2 2024 results, which saw a 14% decline in revenue to €85 billion ($91.53 billion) and a 48% plunge in net profit. However, the recent 50-basis-point rate cut by the US Federal Reserve may provide some respite, as analysts expect the move to boost discretionary spending.
Stellantis’ stock has taken a beating, down over 30% year-to-date. As of Monday’s premarket session, the stock was trading 13.3% lower at $13.91.
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