BUY Stellantis – Fighting giant created, +40% upside – PT EUR 18,

*The merged Fiat Chrysler and Peugeot company started trading today under the new name – Stellantis

*With EUR 3.5bn in synergies the group will get to another level competition wise

*The new giant will produce massive FCF yield and with Tavares in charge with his track record we expect this to accelerate

*Index weighting increase for CAC, MIB and SBF on today will mean that more passive money goes into the name

*Distribution of stake in EO FP will also happen soon – we have seen a couple of upgrades on EO FP over the last couple of days arguing that the overhang in the stock will be less dramatic than what is being priced in – our DCF shows a 100% upside for EO FP with a price target of around EUR 80-90 versus the current EUR 41

*The estimate of the COMAU and EO FP distribution is around EUR 1 worth of STLA

*Estimates are around 0.0174 EO FP share for every Stellantis – including that with the COMAU stake its around EUR 1 in total

*Merger also helps the company transform into more EV business which is good from an ESG perspective

*Manlay who has previously been in charge of Ram’s spin-off and Jeep’s recent success is set to run Americas, NA and Latam which should help the group transform into a much stronger entity

*Our DCF valuation of STLA is EUR 18 short terms while EUR 20 on a long term basis

Stellantis tickers:  STLA IM, STLA FP, STLA US

ANR <GO> has 18 Buys, 2 Holds and 2 Sells on STLA FP

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