Morningstar DBRS Downgrades Stellantis to BBB, Negative Outlook Maintained
Rating agency Morningstar DBRS has downgraded the credit rating of Stellantis N.V. from BBB (high) to BBB, according to a press release dated January 23, 2026. The outlook remains negative for all the automotive group's ratings.
Persistent Challenges in Key Markets
The downgrade reflects Stellantis' ongoing difficulties in its main markets, North America and Europe, leading to a decline in revenue and very low profitability over the past two years, Morningstar DBRS reports. The agency expects revenue growth to be in the low single digits between 2026 and 2028, but anticipates profitability will remain well below the 2023 levels, which were around 16%. According to the agency, this situation is due to internal issues, including a relatively weaker product launch schedule compared to competitors, with several delays, as well as quality issues that have increased warranty costs. Morningstar DBRS expects the industrial EBITDA margin to reach close to 5% and the industrial gross leverage to be around 3.0 times in 2025.
Intensified Competitive Environment
The competitive environment in Europe and North America has intensified, adding strategic complexity and headwinds to Stellantis' profitability recovery, according to the release. This situation is due to several factors, including the increasing pace of innovation in the industry in terms of powertrains, efficiency, and software, the penetration of electric vehicles in various markets, and the consequent erosion of market share to Chinese brands and Tesla, leaders in this segment. In Europe, for example, new car registrations remain about 3 million below the 2019 levels, Morningstar DBRS notes. However, the agency observes a positive dynamic in sales growth, particularly in North America, where Stellantis' global sales volume increased by 13% year-over-year in the third quarter of 2025, highlighting a normalization of inventory levels and the launch of new models.
Gradual Recovery of Industrial EBITDA Margin
Morningstar DBRS anticipates a gradual recovery of the adjusted industrial EBITDA margin to around 9% by 2027, from 2.4% over the last 12 months ending in June 2025, with EBITDA margins reaching close to 5% in 2025 and industrial revenues of approximately 160 billion euros compared to 144 billion euros. Based on these assumptions, the group should be able to maintain an adequate industrial gross leverage for credit ratings, around 2.0 times, and a very low net leverage thanks to significant liquidity reserves, according to the agency. However, these assumptions are based on a high degree of uncertainty due to the rapidly evolving industrial landscape. Morningstar DBRS could revise the rating outlook to stable if the launch of new Stellantis products gains traction, halts the negative evolution of global market share, and reverses the trend in operating margin development. Conversely, the agency could take a negative action if profitability remains very low.
