MILAN (Reuters) – Stellantis shares fell further on Thursday amid concerns over the sustainability of the automaker’s dividend following a profit warning earlier this week.

The shares dropped over 4% to their lowest level since July 2022, bringing their fall this year to more than 43% and cementing their position as worst performers among European auto stocks.

Kevin Thozet, a member of the investment committee at Carmignac, said European automakers were “falling like autumn leaves”, with Stellantis’ profit warning meaning a zero operating margin for the group in the second half of this year.

“This is a real blow to the investment thesis, as it could put the generous dividend at risk and will very likely imply saying ‘bye bye’ to buybacks,” he said.

Barclays downgraded the stock to “equal-weight” from “overweight” and slashed its 2024-26 EBIT (operating profit) estimates by 33-45%. It said Stellantis’ large free cash flow cut raised questions over its dividend and buy-back potential.

“We got wrong-footed on Stellantis, being too slow to acknowledge its US inventory issue and eroding EU/US market shares,” analysts at the UK bank said in a note.

At 0951 GMT, Stellantis, Europe’s No. 5 carmaker by market value and owner of the Chrysler, Jeep, Fiat, Citroen and Peugeot brands, was down 4.3%. The broader auto index fell 1.8%.

Investors have been reducing exposure to European autos in recent months on concerns over a difficult transition to electric engines, fierce competition from Chinese newcomers, and increasingly price-conscious consumers.

(Reporting by Giulio Piovaccari and Danilo Masoni; Writing by Giulio Piovaccari; Editing by Mark Potter)