Stellantis Action Ignores UAW Strike Authorization Vote

The United Auto Workers (UAW) union will hold strike authorization votes at one or more of its locations. Stellantis (STLA) locals in the coming days, UAW President Shawn Fain said in a statement. Facebook Live on Tuesday.

“In our 2023 negotiations, we secured $19 billion in product and investment commitments from Stellantis… And now they are admitting that they have NO intention of honoring those plans,” Fain said during the livestream. “We are 100% within our rights and within our power to strike if necessary.”

Fain said that once a strike is authorized at a Stellantis local, the UAW will meet with the automaker seven times and either resolve the issue or take strike action.

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The UAW’s announcement came after the union filed federal unfair labor practice charges against Stellantis on Monday.

“The commitments we made in the 2023 negotiations extend over the entire term of the agreement of 4 years and 7 1/2 months, so it is not surprising that they were not fully realized in the first year,” Stellantis said in a statement, according to Reuters.

Is Stellantis stock a buy, sell or hold?

While Stellantis is paying little attention to UAW news, up slightly in Wednesday’s session, the automaker has struggled on the price charts, down 30% year-to-date on a total return basis (price change plus dividends). Yet Wall Street is overwhelmingly bullish on the consumer discretionary stock.

According to S&P Global Market Intelligence, the consensus analyst price target for STLA stock is $24.26, which represents an implied upside of over 59% from current levels. Additionally, the consensus recommendation is to Buy.

However, not everyone is convinced by the large-cap stock. Financial services firm CFRA Research has given STLA a hold rating with an $18 price target.

As noted in the company’s first-half earnings report, Stellantis “expects a neutral revenue environment, double-digit adjusted operating margin and positive industrial free cash flow” for this fiscal year, CFRA Research analyst Garrett Nelson said in a July 25 note.

However, the stock’s price challenges appear to have “contributed significantly to these difficulties,” Nelson added. “STLA continues to trade at a significant but justified discount to its automaker peers and we consider a hold rating to be appropriate.”