Stellantis released preliminary results for the first half of 2025, showing a 6% decline in shipments and a 13% decrease in revenue. Adjusted operating income fell by 94% year-over-year to EUR 0.5 billion. The outlook for full-year profitability is lower than consensus expectations due to volume declines and higher costs.

The company is experiencing severe deleveraging from continued volume declines, higher warranty costs, negative geographic and product mix effects, as well as USD 300 million in US tariffs. While volumes are expected to improve in the second half, deleveraging will remain a significant challenge. Additional tariff-related costs of around EUR 900 million are anticipated.

Lowering the 2025 forecast will have a minimal impact on the fair value estimate for Stellantis, which assumes an average adjusted operating income margin of 5% over the forecast period. The company incurred a significant unusual expense of EUR 3.3 billion, reflecting a shift towards focusing on core operations. This move is seen as positive for the company’s long-term prospects.

Read more at Morningstar: Guiding Market Expectations for Significantly Lower Profitability