Jeep, Ram parent Stellantis stock surges on reaffirmed outlook, cost cuts

Stellantis ( STLA ) beat third quarter revenue estimates on Wednesday and reaffirmed its full-year outlook as cost cuts and a refreshed lineup showed signs that CEO Antonio Filosa's turnaround plan is working.

Filosa said in a statement that the company remains "on track to implement at least 40% of the total 6 billion euros [$6.7 billion] in run-rate efficiencies by the end of this year," and as a result, Stellantis reaffirmed its 2026 guidance, with the expectation of positive industrial free cash flow in 2027.

Stellantis's full-year guidance calls for mid-single-digit revenue growth, a low-single-digit adjusted operating margin, and improved industrial free cash flow. Analysts see a 1.65% full-year margin and negative industrial free cash flow of 2.98 billion euros ($3.3 billion). Interestingly, Stellantis has already burned 4.9 billion euros ($5.5 billion) through September, so that estimate implies a fourth quarter inflow of nearly 2 billion euros ($2.1 billion).

Stellantis stock surged 15% in midday trade in New York, but the stock is down 57% year to date.

As for the quarter, revenue rose 1% to 37.6 billion euros ($41.8billion) vs. 36.37 billion euros ($40.5 billion) expected, per Bloomberg consensus. Adjusted operating income climbed to 256 million euros ($285 million) from 90 million euros ($100 million) a year earlier.

Industrial free cash flow came in at a loss of 4 billion euros ($4.5 billion) versus a loss of 3.4 billion euros ($3.8 billion) expected by analysts.

Across regions, North America swung to a 64 million euro ($71 million) profit, helped by the Jeep Cherokee hybrid and the Ram 1500 Hemi V8 .

Europe weighed on results. Stellantis posted a 311 million euro ($346 million) adjusted operating loss there as prices fell and sales shifted toward less-profitable EVs, while BYD, Volkswagen, and Renault added to pricing pressure.

Global shipments, which Stellantis reported earlier this month, slipped 1% to 1.29 million vehicles, just shy of the expected 1.3 million. North America fell 12% to 357,000 versus the 362,500 expected, as planned production downtime hit the Jeep Grand Cherokee and Compass. Enlarged Europe rose 10% to 588,000, ahead of the 578,500 estimate, driven by growth in EV and Leapmotor.

The shutdowns were aimed at clearing US dealer lots. Inventory stood at 368,000 vehicles at the end of September, or 84 days of supply, down from 92 days in June. Stellantis expects that to fall to 320,000-350,000 units by year-end.

Stellantis plans to spend 60 billion euros ($66.8 billion) through 2030 on dozens of new models, prioritizing Jeep, Ram, Peugeot, and Fiat.