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Stellantis and BMW headed in opposite direction Tuesday as investors responded to new margin guidance set at both automakers
Stellantis
STLA,
STLA,
shares rallied 4% in Milan as the maker of Chrysler, Fiat and Peugeot generated first-half operating margins of 11.4%, helped by a particularly strong showing in North America, where margins were 16.1%. It’s now targeting an annual margin of 10%, above the analyst consensus of 8.1%.
Pierre-Yves Quéméner, an analyst at Stifel, said the magnitude of the earnings beat was a surprise.
BMW
BMW,
shares however fell 5% in Frankfurt, even as the luxury automaker reported second-quarter earnings ahead of expectations. The second-quarter profit was boosted due to a pension accounting change based on the likelihood of German employees who will switch to a defined contribution plan.
BMW nudged its annual margin target up in the automotive segment by one percentage point to between 7% and 9%, which implies a declining margin for the second half from the 13% achieved in the first half, pointed out Quéméner.
The broader Stoxx Europe 600
SXXP,
was steady in afternoon trade. BP
BP,
rose after the oil giant raised its dividend and increased its stock buyback program, and French bank Societe Generale
GLE,
rallied after the bank’s second-quarter earnings.
Smiths Group
SMIN,
slumped 9% after the company’s deal to sell its medical equipment arm for as much as $2.5 billion to TA Associates, and use the proceeds for a combination of industrial deals and shareholder returns.
