Analyst Note| Richard Hilgert |
The merger of no-moat-rated PSA Peugeot Citroen and Fiat Chrysler was completed on Saturday, Jan. 16. After merger adjustments including higher debt and cash, plus a EUR 2.9 billion Fiat Chrysler special dividend, the spin-off of Faurecia to Stellantis shareholders, and all share-count adjustments, the market currently values Stellantis at roughly EUR 13, representing a 28% discount to our premerger EUR 18 Stellantis fair value estimate. Even so, our premerger fair value estimate does not include EUR 5.0 billion in targeted annualized cost savings, 80% of which is expected to be realized in the fourth year following the merger. We are placing shares of Stellantis under review while we update our company report and model. We expect to publish an updated Stellantis company report and fair value estimate during the first quarter of 2021.