October 26, 2026
Flat Q3 volumes, a 50% U.S. tariff on select Canadian goods, and a stock near ten-year lows set up Wednesday’s earnings
Hey there, bargain hunter. When a stock trades at roughly 5-6x forward earnings while the business behind it posts AOI margins of 1.8% and industrial free cash flow that only recently climbed back from deeply negative, the word “cheap” deserves some scrutiny before you reach for the buy button. Stellantis reports Q3 2026 financial results on Wednesday, October 28, 2026. The numbers already on the board are not encouraging, but the valuation gap is real, and the question is whether the market has already priced in everything that could go wrong.
J.P. Morgan Is Building on This Under-$1 Crypto
While fear hits levels not seen since 2022, major institutions aren’t backing off – they’re building. One little-known crypto is being used for real infrastructure tied to moving traditional assets on-chain. With supply tightening and activity expected to rise, this setup is getting harder to ignore.
Get the full breakdown on this under-$1 crypto before attention grows
Scoreboard
Third quarter U.S. unit sales came in at 324,277 vehicles, essentially flat year over year. Year-to-date, total sales are up 3%. North American Q3 global shipments fell roughly 12% in the company’s highest-margin region, a drag the rest of the world could not fully offset. The Milan-listed shares closed at €3.93 on October 13, 2026, sitting near a ten-year low, with the NYSE-listed STLA last printing around $5.27 heading into the report.
What Actually Happened
The headline volume number flatlines, but the mix under it moves. Retail sales of Ram 1500 rose 42% and Dodge Durango retail sales rose 18%. Those are the profitable trucks and SUVs. The problem is that Jeep, Stellantis’s highest-volume American brand, remains uneven, and North American shipments contracted precisely where margins are thickest. Guidance confirmed at Q2 calls for mid-single-digit revenue growth and an AOI margin in the low-single-digit range for the full year, with H2 weighted toward Q4 after the Q3 summer shutdown. Wednesday’s report will test whether that Q4 weighting is credible or optimistic.
The Tariff Layer
The 50% Section 338 tariff on selected Canadian goods took effect August 22, 2026, after trade talks between Washington and Ottawa collapsed. Critically for Stellantis, the policy has already included motor vehicles, but published U.S. Customs guidance has also indicated that some auto parts may be excluded from the Section 338 additional duties because they are already covered by separate auto and auto-parts tariff programs. The company’s full-year net tariff headwind is guided at €1.0 billion to €1.2 billion for 2026. That compares to an H1 2026 AOI of just €1.7 billion total. In other words, the tariff bite is large relative to thin margins. Ottawa responded with a C$8.7 billion (US$6.2 billion) federal-provincial package to protect Ontario auto and steel jobs, announced October 21, but that money flows to workers and plant modernization, not to Stellantis’s income statement.
One idea. Backed by the analysts.
Join 130,000+ self-directed investors who get one trade idea a day, sourced from top Wall Street analysts and explained in plain English. Free, and a five-minute read.
How the Business Makes Money
Stellantis owns 14 brands across North America, Europe, South America, and the Middle East. North America is the profit engine. In H1 2026, North America generated €34.3 billion in revenue (up 21%) but only a 1.6% AOI margin, evidence of how far the recovery still has to travel. Middle East and Africa ran a 12.3% AOI margin. South America produced 10.0%. Europe lost money. The FaSTLAne 2030 plan targets a five-year €60 billion investment to accelerate growth, and the company raised €5 billion in hybrid perpetual notes in Q1 to shore up liquidity.
The regulatory backdrop compounds the margin problem. The CAFE rollback resets compliance-credit economics for every traditional automaker, including those running on thin margins.
Is It Cheap?
At a forward P/E of roughly 5-6x, Stellantis is cheaper than Ford at 6-7x and considerably cheaper than GM at nearly 8x. The price-to-sales ratio sits around 0.1x, a number that makes the stock look absurdly inexpensive until you remember that a 1.8% AOI margin converts very little of that revenue into income. The GuruFocus GF Value estimate of $13.80 flags the stock as a possible value trap. Cash, cash equivalents and financial securities were €34.6 billion at June 30, 2026, while total debt was €52.1 billion, and industrial free cash flow was still negative through June 30.
5 Little-Known Stocks Behind Today’s Defense Tech Shift
Behind the headlines, a major transformation is underway.
Modern warfare is being driven by AI, autonomous systems, and next generation technology. A handful of lesser known companies are helping power this shift.
This report uncovers five stocks quietly playing a critical role in the future of defense.
Bull / Base / Bear
- Bull: Q4 volume recovery materializes, North American margins expand toward 3-4%, tariff headwinds are absorbed or partially resolved before January 2027, and STLA re-rates toward 8x forward earnings, implying meaningful upside from current levels.
- Base: Volumes stabilize, margins grind higher from a low base, industrial free cash flow turns positive in 2027 as guided, and the stock stays range-bound in the $5-7 range while the story rebuilds.
- Bear: President Trump follows through on the August 24, 2026 social media post threatening to increase tariffs on Canadian cars, trucks, automotive parts and steel to 50% effective January 1, 2027, North American margins stay compressed, and guidance is cut on Wednesday, sending shares toward the €3.81 / $4.30 52-week low.
Action Plan
Do not buy ahead of Wednesday’s print. The GM comparison is instructive: GM beat on every line, raised adjusted automotive free cash flow guidance, authorized a $20 billion buyback, and the stock still fell roughly 7% on October 20, 2026. The market is not rewarding Detroit right now. If Stellantis guides Q4 with specifics, confirms tariff headwinds are stable at €1.0-1.2 billion, and shows North America margins improving, a starter position in the $5.00-5.25 range earns a look. Scale in thirds over 60 days. If Wednesday brings a guidance cut or silence on Q4, wait for a cleaner entry near the €3.81 low.
Cheap Investor Checklist
- Q3 AOI margin: does it hold above 1.5% or slip further?
- Full-year tariff headwind: does management revise from €1.0-1.2 billion upward?
- North America AOI margin direction: improving or deteriorating vs. H1’s 1.6%?
- Industrial free cash flow: any update to the 2027 positive target?
- Q4 guidance specificity: vague optimism or concrete volume and margin numbers?
- Canada and U.S. tariff policy changes: any concrete change in scope, exclusions, or timing that affects auto parts and cross-border supply chains?
- January 2027 auto tariff escalation risk: management commentary on contingency planning.
Bottom Line
If Wednesday’s call confirms margins are stabilizing and the tariff hit is contained, the discount at 5-6x forward earnings starts to look like genuine opportunity. If Stellantis cuts guidance or goes quiet on Q4 specifics, the discount is not a gift. It is the market telling you something the stock price already knows.
