Shares in auto giant Stellantis (STLA) were flat today after another reputation-bashing recall affecting thousands of its vehicles.
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The U.S. National Highway Traffic Safety Administration (NHTSA) said Stellantis, whose brands include Chrysler, Dodge and Fiat, is recalling nearly 164,000 Jeep vehicles in the United States due to potential door trim detachment problems.
Road Hazard
The recall affects certain Chrysler Jeep Wagoneer and Jeep Grand Wagoneer models manufactured between 2022 and 2025.
The safety issues, added the NHTSA, involve trim on both the driver and passenger doors that could come off the vehicles and create a potential road hazard.
Jeep owners don’t need to panic too much as Stellantis dealers will inspect the affected vehicles and replace the door trim free of charge.
Investors, however, may not feel so comfortable. This is the latest in a long line of vehicle recalls which have impacted Stellantis and, arguably, have hindered its share price this year – see below:
Earlier in September, the NHTSA said Stellantis was recalling about 92,000 Jeep Grand Cherokee vehicles in the U.S. due to a software error within the hybrid control processor that could cause a loss of drive power.
Last week, the regulator opened a probe into about 287,000 Chrysler Pacifica minivans from the 2017-2018 model years over potential issues with their electric power steering.
Reputation Hit
In addition, this week Stellantis had to recall 53,849 vehicles over potentially faulty fuel pumps.
The recall covers certain 2017-2018 Alfa Romeo Giulia and 2018-2019 Alfa Romeo Stelvio vehicles; the auto safety regulator said.
The vehicles had fuel pumps that may fail, which could cut off fuel flow and drive power, increasing the risk of a crash.
At a difficult time for the auto industry given tariff uncertainty, rising supply chain costs and faltering consumer confidence, this spate of recalls is an unwelcome hit to brand reputation.
It is why it has been identified as a key risk by the business. Investors need to be wary of such risks before looking to buy stocks.
Is STLA a Good Stock to Buy Now?
On TipRanks, STLA has a Hold consensus based on 4 Buy, 13 Hold and 2 Sell ratings. Its highest price target is $14.12. STLA stock’s consensus price target is $10.64, implying a 9.47% upside.
