Fitch shifts Stellantis view to positive

Fitch Ratings said it revised Stellantis NV's outlook to positive from stable and affirmed its BBB+ long-term issuer default and senior unsecured instrument rating.

The improved outlook mirrors an expectation that Stellantis's financial metrics will consistently beat positive rating sensitivities in the absence of adverse U.S. market conditions, the agency said.

“Fitch forecasts Stellantis's EBIT margin at around 10% and a free cash flow (FCF) margin consistently above 3%, which is commensurate with higher-rated German peers'. This is despite higher labor costs and our expectation of lower pricing and a less favorable vehicle mix for the next 12-18 months. The strength of Stellantis' financial profile mitigates its lack of presence in the premium/luxury segments, whose demand and pricing tend to be recession-proof,” the agency said in a press release.

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