Notably, the analyst notes that Stellantis can sustainably generate more than €22 billion operating cash flow annually and expects capex to remain elevated at €12 billion to €13 billion. 

With UAW negotiations on the verge of completion, the analyst anticipates the new CFO to become more explicit on shareholder distribution policy and expects continued dividends and buy-backs at >€7 billion.

Also, Roeska projects Stellantis' strategy for reducing debt, funding pensions, and normalizing working capital to be financed by its existing €25 billion excess cash resource.

However, the analyst lowered the earnings estimate by 5% for FY24 and 12% for FY25 owing to the slowing macro and pricing environment in the U.S. and Europe and assumed €2 billion additional labor cost over three years.

The net income estimate is now at the lower end of the consensus, around -10% below the consensus median in FY24 and -8% in FY25, writes the analyst. 

Price Action: STLA shares are trading higher by 1.79% at $19.01 on the last check Wednesday.