Stellantis Earnings: Revenue and Shipments Disappoint in Slow Start to Year; Shares Attractive

No-moat-rated Stellantis reported first-quarter revenue of EUR 41.7 billion, falling 12% from the prior year. Excluding unfavorable currency, organic revenue was down 9%. Volume was the primary driver of lower revenue for the quarter, which management cited as transitional pains in preparing for new product launches later this year. While we expect volumes to recover in the second half of the year, the declines experienced in the first quarter could be difficult to recoup this year, but we don’t think it raises concerns of a slowdown in end market demand. Additionally, net pricing gains in the quarter partially offset lower volume and mix. The automaker (French-domiciled for accounting purposes) discloses only revenue in the first and third quarters. After reviewing first-quarter results, we’ve decreased our fair value estimate to EUR 36 from EUR 39 due to lower near-term shipments in our forecast.