Stellantis: Announced Change in CFO Unexpected, but No Fair Value Change

We were surprised by the unexpected announcement that no-moat-rated Stellantis STLAM has named Natalie Knight as CFO, replacing Richard Palmer, effective July 10, 2023. Palmer, with about 20 years at Stellantis and predecessors, was one of the architects that combined Fiat and Chrysler in 2014 and then, in 2021, Peugeot and Fiat Chrysler to form Stellantis. The firm gave no reason for Palmer’s departure, and CEO Carlos Tavares added, “We wish Richard the very best for the future and in any new challenges that await him.” The Stellantis press release also said Palmer was staying on until the end of June “to ensure a smooth handover.”

We think the selection of Knight, currently the CFO of international grocer Ahold Delhaize, is a somewhat unusual choice. While Knight has substantial multi-national business experience, the executive has no automotive industry experience. According to the Stellantis announcement, before joining Ahold Delhaize in 2020, Knight “was the CFO at Arla Foods in Denmark, and held several senior finance positions during her 17 years at Adidas AG in Germany and the U.S., after investor relations roles at BASF and Bankgesellschaft Berlin.”

We respect Carlos Tavares, who has demonstrated solid performance in his tenure as CEO, first with Peugeot since 2014, and now with Stellantis. And Tavares obviously has confidence in Knight, saying, “I’m convinced that she will play a strategic role in setting the new impetus and unleashing the great potential of Stellantis’ value.”

Despite the unexpected change in CFO, our EUR 38 fair value estimate on the shares of Stellantis is unchanged. The stock currently trades at a hefty 57% discount to our fair value.