Moody’s has confirmed the Baa1 ratings (a classification that describes “adequate possibilities of interest payment and capital repayment”, but with the possibility that this may be influenced by “exogenous factors”) and (P)P-2 for Stellantis. At the same time, it revised the outlook from stable to negative. Recalling that Moody’s is a private company based in New York that conducts financial research and analysis on commercial and state activities, research internationally followed and known as one of the main references for the stock market (but not only), the news is yet another confirmation of a worrying trend.
Stellantis, after the results of the third quarter of 2024, more bad news arrives
This decision, the change in the assessment of Stellantis, was made due to the forecast of significant cash burn in the second half of 2024, following the profit communication recently issued by management, which predicts a recovery in operational performance only starting from next year.
Moody’s emphasized that Stellantis’ solid liquidity represents an important financial reserve to face this critical phase. Expectations of improved operational performance and free cash flow in 2025 remain, therefore, very credible. The rating agency also recalled that Stellantis’ profit warning suggests very reduced margins, close to zero, for the second half of 2024, along with a considerable absorption of financial resources.
Regarding the 2024 fiscal year, Moody’s expects a decline in Stellantis’ revenues, with a significant reduction in the EBITA margin (also a figure, specifically a financial indicator related to a company’s ability to generate cash flows). This margin has been adjusted and could fall to around 4%. However, for 2025, a strong recovery in sales is expected, especially thanks to the recovery of shipments in the United States, although revenues could remain lower compared to 2023 levels.