The United Auto Workers (UAW) will hold strike authorization votes at one or more of its Stellantis (STLA) local chapters in the coming days, UAW President Shawn Fain said in a Facebook Live on Tuesday.
"In our 2023 negotiations, we secured $19 billion in product & investment commitments from Stellantis… And now they are admitting they do NOT plan to honor those plans," Fain said in the livestream. "We are 100% within our rights and within our power to take strike action if necessary."
Fain said that once a strike is authorized at a Stellantis local, the UAW will meet with the automaker seven times and either resolve the issue or take strike action.
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The UAW's announcement came after the union filed federal unfair labor practice charges against Stellantis on Monday.
"The commitments we made during 2023 negotiations span the life of the 4-year, 7-1/2 month agreement, so it is not surprising that they haven't been fully realized in the first year," said Stellantis in a statement, according to Reuters.
Is Stellantis stock a buy, sell or hold?
While Stellantis is brushing off the UAW news, up modestly in Wednesday's session, the automaker has struggled mightily on the price charts, down 30% for the year to date on a total return basis (price change plus dividends). Yet, Wall Street is mostly bullish on the consumer discretionary stock.
According to S&P Global Market Intelligence, the consensus analyst target price for STLA stock is $24.26, representing implied upside more than 59% to current levels. Additionally, the consensus recommendation is Buy.
Not everyone is all in on the large-cap stock, though. Financial services firm CFRA Research has a Hold rating on STLA with an $18 price target.
As indicated in the company's first-half earnings report, Stellantis "expects a neutral revenue backdrop, double-digit adjusted operating income margin, and positive industrial free cash flow" this fiscal year, said CFRA Research analyst Garrett Nelson in a July 25 note.
However, the stock's price struggles seem "to have largely accounted for these challenges," Nelson added. "STLA continues to trade at a steep but justified discount to automaker peers and we view a Hold rating as appropriate."
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