MILAN, Aug 3 (Reuters Breakingviews) - Stellantis (STLA.MI) boss Carlos Tavares is delivering the goods. The group formed in January from the merger of Fiat Chrysler Automobiles and Peugeot-maker PSA reported on Tuesday an 11.4% adjusted operating profit margin for the first half of the year. That thrashed a previous 2021 target of between 5.5% and 7.5%, prompting Tavares to hike his goal for the year to 10%. That’s considerably fatter than the 7.4% that Volkswagen (VOWG.DE), (VOWG_p.DE) is expected to deliver, according to Refinitiv estimates.
Given his track record, Tavares’s upgrade should not surprise. Under his watch, PSA’s adjusted operating margin rose to 8.5% in 2019 from 5.9% two years earlier. His ambitions for Stellantis go beyond that. Yet he now boasts a North American business that delivers consistent double-digit returns. Expected savings of 4 billion euros over four years will give him a further edge. Investors can sit back and enjoy the ride. (By Lisa Jucca)
On Twitter http://twitter.com/breakingviews
Capital Calls - More concise insights on global finance:
SocGen revamp starts on right foot read more
Grab partially delivers the goods ahead of SPAC read more
Fund services group’s poker face pays off read more
Santos deal tries new angle on less is more read more
EU stress tests strengthen case for Italy bank M&A read more
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.