Stellantis jumps after the earnings beat. Will it maintain gains?

Shares of Stellantis N.V. (LON:0QXR) rose up to 6.58% on Wednesday after the company reported a 13.4 billion euros profit in 2021. The profit was almost three times from the prior year in the debut year since the merger of Fiat Chrysler Automobiles (FCA) and PSA Group.

The financial performance, which beat estimates, boosted the company’s outlook amid supply snarls and chip shortages. Stellantis says it focuses on more profitable vehicles to overcome material issues, projecting another double-digit return this year.

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Since its debut, Stellantis has been touted as an attractive growth stock. An asset utilization ratio of 0.88 beats the industry average of about $0.64. This means that the company earns $0.88 for every dollar in an asset it owns.

From a sales perspective, the stock is an attractive hold in the long term. Ahead of next week, when Stellantis unveils its long-term strategy in the electric car market, the stock is holding gains.

STLA maintains $15.5 support, a buy opportunity?

From a technical perspective, Stellantis has established $15.5 as the clear support. The stock has tested the level severally, and the price is currently rebounding. The stock is likely to hold the gains and continue to surge due to the boosted outlook.

However, it is likely to find resistance at the previous top, around $20. At the current level, STLA is a hold, with a potential buy opportunity on a retracement at or towards the 50-day moving average or $15.5 support.

Summary

Stellantis has an attractive valuation based on the asset turnover. With the financial results and outlook in the electric vehicle sector backing the valuation, the stock is a hold. Attractive buys can be taken on a retracement as long as the $15.5 support holds.

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