Renault Shares Rise Following Analyst Call

Renault shares experienced a nearly 3% increase on Tuesday, fueled by a favorable pre-close call with analysts ahead of the company’s third-quarter revenue report, which is set for October 24.

The automaker reaffirmed its full-year guidance for 2024, which helped boost investor confidence. During the call, Renault acknowledged that while sales volumes were weak in the third quarter, they anticipate improvements in the fourth quarter due to new vehicle launches.

HSBC analysts noted a decline of 8.6% year-on-year in vehicle registrations for July and August, stating that September numbers were more in line with the previous year. They expect this trend to reverse in the fourth quarter, supported by the introduction of new models.

In terms of pricing, Renault mentioned that it has entered a phase of normalization, with the company passing on some cost reductions to customers while gradually improving its product mix. Analysts observed that although the geographic mix was slightly negative, the product mix is expected to continue improving in the fourth quarter.

The company’s effective inventory management and advantageous position regarding residual values were also points of emphasis. HSBC acknowledged Renault’s careful management of residuals, noting that the company is currently performing better than its peers and has seen improvements year-on-year for both the Renault and Dacia brands.

Additionally, Renault’s services division, Mobilize, reported high double-digit growth, largely driven by rising interest rates, which enhanced the company’s overall performance.

HSBC has maintained its Buy rating and target price of EUR 58.0 for Renault, indicating the potential for a 57% increase in the stock value. Analysts emphasized that the full impact of Renault’s new Duster model will be realized in the fourth quarter of 2024 and the first quarter of 2025, with early orders for the R5 model also exceeding expectations, signaling further growth potential for the company.