Stellantis NV (NYSE:STLA) shares are plunging Monday after it revised its fiscal 2024 guidance to reflect its corrective actions on performance issues in North America and deteriorating global industry dynamics. Automotive rivals, including General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE:F), are trading lower in sympathy with Stellantis.
The company projects fiscal 2024 adjusted operating margin of 5.5% to 7.0%, below its previous expectations for double-digit growth.
It now expects fiscal 2024 industrial free cash flow of negative €5 billion – negative €10 billion versus previous positive cash flow expectations.
The auto company is targeting 330,000 units of dealer inventory by the end of 2024 in the U.S., up from a previous goal of the first quarter of 2025.
The company’s corrective actions include declines in North American shipments of more than 200,000 vehicles in the second half of 2024 (down from 100,000 previously expected) compared to the prior-year period, increased incentives for 2024 and earlier models and productivity improvement initiatives.
In July, Stellantis NV reported a 14% drop in revenue, hitting revenue of €85 billion ($91.53 billion) in the first half of 2024. Combined shipments declined 12% and net profit plummeted by 48%.
On a positive note, the US Federal Reserve cut the lending rate by 50 basis points, lowering the central bank’s benchmark rate to 4.75%-5% to stimulate demand. Analysts expect the cut to boost growth in discretionary spending.
Stellantis shares are down more than 30% so far this year.
price action: STLA shares were down 13.3% to $13.91 premarket at last check Monday.
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This article What’s happening with Stellantis stock on Monday? originally appeared on Benzinga.com
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