MILAN (Reuters) -- Fiat Chrysler Automobiles will have its work cut out on Wednesday to convince investors it can deliver its turnaround plan after model delays, deferred investments and slowing demand in key markets Asia and Latin America.
CEO Sergio Marchionne said earlier this month the world's seventh-biggest carmaker could still grow profits five-fold between 2013 and 2018, eliminate net debt and turn its Jeep, Alfa Romeo and Maserati brands into global forces.
But nearly halfway into the five-year plan, many analysts are skeptical he will succeed to erase 7.85 billion euros ($8.5 billion) of debt and grow net profit to around 5 billion euros.
"'Ambitious' is not really an adequate word to describe it, 'fantasyland' might be more appropriate," said Bernstein's Max Warburton, who has an "underperform" rating on FCA stock.
Marchionne said this month that FCA's performance last year came in at the top end of its own forecasts, which included an adjusted net profit of 1.2 billion euros -- a long way from the 2018 target.
Alongside annual results on Wednesday, FCA is expected to announce a more prominent role for the fast-growing Jeep brand in its 48-billion-euro investment plan, while some models for Alfa Romeo and Maserati will likely be delayed.
The carmaker will also likely refocus efforts on North America and Europe to make up for weaknesses elsewhere.
In 2014, FCA promised a sales jump in Latin America and a stronger presence in Asia, especially via local production of Jeeps. But economic growth slowed in China and tanked in Latin America, and FCA deliveries fell in both regions last year.
While investors understand the need to adjust to weakening markets, they are less forgiving about product delays.
Maserati's relaunch appears to have stalled, with sales of the luxury brand falling, and operating margin halving to 5 percent in the first nine months of 2015. Its long-awaited SUV is also several months late.
FCA presented the new Alfa Romeo Giulia sedan in June, but the vehicle has yet to go on sale. Sources close to the matter say the model has faced technical hiccups and full-scale production may only start in March, while the launch of a related SUV may be pushed back to early 2017.
FCA's share price has lost a fifth in value this year, hit by a selloff in global equities over worries about China, and after the carmaker parted ways with luxury unit Ferrari.
But out of 23 analysts, only three have a "sell" rating on the stock, showing belief that even if FCA falls short of its targets there are grounds to expect an improvement. Analysts on average forecast net profit of about 3 billion euros in 2018.
Marchionne has steered Fiat and Chrysler away from the edge of bankruptcy, the unified FCA has returned to profit in Europe and narrowed the margin gap with U.S. rivals, and new launches in popular segments have helped it to win market share.
"A big question is whether price discipline in the United States will hold through the second half of 2016 and whether FCA presents some tangible cost actions in the new plan," said Evercore ISI analyst George Galliers.
Marchionne is in a race against time to strengthen FCA's model lineup and finances before the U.S. car market comes off its peak and further close the margin gap with larger rivals GM and Ford. Some 85 percent of FCA's operating profit was made in North America in the first nine months of 2015.
Marchionne has said executing the 2018 plan will put FCA in better shape to negotiate with potential partners and vowed to put his merger ambitions on the back burner for now after an attempt to tie-up with GM failed. However, some analysts think the 63-year-old has not given up on a deal.
"He is a poker face, he needs a partner or additional disposals to pay for the plan," said Tommaso Iaquinta, a lawyer for boutique investment bank Livolsi-Iaquinta & Partners, which has invested in FCA in the past. "2016 will be all about M&A."