Stellantis N.V. (NYSE:STLA) shares declined more than 6% on the Italian stock market on Thursday after the automaker posted a return to profitability in the first quarter of 2026, though analysts at Jefferies said a tariff-related accounting adjustment masked underlying weakness in North America — a key region for the company’s recovery strategy.
Adjusted operating income came in at €960 million, representing a 2.5% margin and exceeding analyst expectations of €696 million and a 1.8% margin.
However, Jefferies highlighted an estimated €400 million IEEPA tariff adjustment included in North American results. Excluding this factor would bring adjusted operating income down to roughly €560 million, or a 1.2% margin, falling short of consensus forecasts.
“NA missed headline, and to a greater extent excl IEEPA, with mix and cost possibly looking weaker than expected,” Jefferies analysts said.
Revenue growth offsets mixed regional performance
Net revenues increased 6% year over year to €38.13 billion, outperforming expectations of 4.7% growth, supported by higher volumes across all regions. Net profit reached €377 million, compared with a loss of €387 million in the same period last year.
North America generated €16.11 billion in revenue, the largest contribution among segments, and delivered adjusted operating income of €263 million at a 1.6% margin, compared with a €542 million loss a year earlier. Shipments rose 17% to 379,000 units, driven by models such as the Ram 1500, the updated Jeep Grand Wagoneer, and the newly launched Jeep Cherokee.
Europe weak as pricing pressure weighs
In Enlarged Europe, adjusted operating income totaled just €8 million on revenues of €14.38 billion, equating to a margin of 0.1%, down from 2.1% a year earlier. Performance was impacted by negative pricing trends and an unfavorable product mix.
Jefferies described the region as “a small beat with moving parts roughly as expected,” while noting that pricing pressure remains the primary challenge.
South America delivered adjusted operating income of €393 million with a 10.8% margin, while the Middle East and Africa contributed €282 million at an 11.8% margin. Asia Pacific reported a loss of €30 million.
Cash flow improves but misses expectations
Industrial free cash flow was negative €1.92 billion, an improvement of 37% compared to the prior year but below the Jefferies estimate of negative €1.2 billion, due to higher-than-expected working capital outflows.
The quarter included around €700 million in cash outflows related to charges recorded in the second half of 2025. Capital expenditure declined by €800 million year over year to €1.62 billion.
Industrial liquidity stood at €44.14 billion as of March 31, 2026, representing 28% of trailing 12-month revenue, within the company’s target range of 25% to 30%.
Guidance maintained with lower tariff assumptions
Stellantis reiterated its full-year 2026 outlook, projecting mid-single-digit revenue growth, a low-single-digit adjusted operating margin, and improved industrial free cash flow year over year. The company also expects approximately €2 billion in cash outflows tied to second-half 2025 charges and anticipates returning to positive industrial free cash flow in 2027.
Jefferies, which maintains a “buy” rating and a $11.70 price target on the U.S.-listed shares, noted that the guidance now assumes a lower net tariff impact of €1.30 billion, down from €1.60 billion, reflecting the IEEPA adjustment.