Shares of Stellantis (NYSE:) fell over 2% on Tuesday after JPMorgan said it sees the company’s revenues down 10% year-over-year (YoY) in the first quarter.
In its first glance at Stellantis’s Q1, the investment bank added that they also see volumes down 6% (YoY), a negative geo mix, pricing stable, and currency at -4% (YoY) on the quarter.
“Volumes in NA (North America) are temporarily hit by some product changeovers, downtime in facilities, impacting models such as the RAM1500 and the Dodge family, and the high base effect on the Jeep Cherokee last year,” said JPMorgan. “The firm is, in our view, looking to maintain a tight grip on a) inventories and b) pricing power.”
The bank doesn’t expect Stellantis inventories in North America to come down until the second half of the year, creating a steady decline in inventories, thus maintaining a firm grip on pricing power in the region.
“Analysts expect the firm to address the need to reduce the cost base in NA if some of the prices for some of the vehicles are repositioned slightly downward to reduce incentives and maintain flat net pricing power,” added the bank.
“With regards to the other regions, Europe and Latam, analysts expect the firm to grow in line or slightly below the market, protecting pricing power, possibly with a lower mix of bev vs exit rate 2023, which should lower the asp, but protect earnings momentum.”
