Stellantis NV (NYSE:STLA, EPA:STLA) chief executive Carlos Tavares’ surprise departure has ladened even more pressure on the Vauxhall, Peugeot and Jeep maker’s investment thesis, according to JPMorgan.
Tavares’ decision to leave with immediate effect comes less than two months after Natalie Knight resigned as finance chief at the struggling Amsterdam-based business.
“We don’t recall a time when we have seen both CEO and CFO leaving in such a short period,” JPM analysts wrote in response to today’s news.
The double-whammy of senior exits “sets an unprecedented challenge for investors looking to invest in a firm with such volatility in the management team”, said JPM.
Although Stellantis reiterated its 2024 financial outlook today, “with such a turnaround in the top management team, question marks may be raised as the market will in our view price in no major earnings improvement in FY25 until the management team has been reset in the course of FY25”, added the bank.
Possible successors
JPMorgan analysts highlighted a mix of internal and external potential successors to Tavares.
Key internal candidates could include Maxime Picat, head of purchasing, and Antonio Filosa, head of North America, both of whom bring extensive experience within Stellantis.
Among the external candidates, Luca de Meo, the current boss of Renault, has been identified as a strong fit.
Whoever ends up replacing Tavares, he or she is in for a challenge, suggested Dan Coastsworth, investment analyst at AJ Bell.
“(Tavares) may be a respected name in the industry but given Stellantis has been stuck in reverse gear for some time, (his resignation) shouldn’t come as any great surprise.
“That’s not to say life will likely be much easier for his successor, who is expected to be named in the first half of next year.
“The sector faces multiple pressures including the uncertain timing of any transition to electric vehicles and competition from rivals in China. The key North American market has been looking rather tricky for Stellantis, too.”
Despite the numerous senior exits, JPM has retained an ‘overweight’ rating on Stellantis stock with a €17 price target.
Stellantis shares were swapping for €11.51 at the time of writing, having dipped 8.2% on Monday.