“Top of the line in utility sports! Unexplained fires are a matter for the courts!” Yes, that is a line from The Simpsons, specifically, the episode The Last Temptation of Krust, in which Krusty the Clown sold out once again to endorse the Canyonero line of SUVs. But as so often happens, life imitates art, as legacy automaker Stellantis (STLA) finds itself with unexplained fires of its own in its Jeep line. Investors took the matter well, though, and sent Stellantis shares up fractionally in Monday afternoon’s trading.
The National Highway Traffic Safety Administration is leading an investigation into Stellantis and trying to bring some explanation to those unexplained fires. In fact, it is targeting over 781,000 newer-model Jeeps—Wranglers and Gladiators—over “underhood fires.” It currently has nine reports of said fires, with one reported injury. The Jeep models that are impacted are those produced from 2021 to 2023.
Interestingly, most of the fires in question happened when the ignition was off. The issue right now seems to be around the power steering pump’s electrical connector. This meshes with other reports saying the fires tend to happen on the passenger side of the engine compartment, where the part in question is located. For its part, however, Stellantis is cooperating with the investigation, which may be the first step before an active recall.
But Wait! There’s More!
Earlier today we also found out about a stability issue in Ram trucks. That has already progressed to an active recall, with around 1.5 million Ram trucks impacted. The electronic stability control system is the target of this recall, with most of the trucks in question found in North America. There are, however, pockets of said trucks active in other markets, so anyone who purchased a Ram truck with a model year between 2019 and 2021 should be keeping an eye out.
The upshot of that report, though, is that the brakes will still work in the trucks. However, since U.S. regulations require stability control to work all the time, a recall was necessary. Dealers will be able to run the software updates for no charge.
Is Stellantis a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on STLA stock based on 13 Buys, three Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 10.66% loss in its share price over the past year, the average STLA price target of $27.26 per share implies 74.24% upside potential.
