On Tuesday, Barclays raised its recommendation on Renault to 'overweight', from 'in-line weighting', and raised its price target from €36 to €60, believing that it was not too late to take advantage of the stock's rebound.

While acknowledging that the share price has already appreciated by 30% over the past month, the research firm stresses that this recovery has taken place at very low levels, and believes that it is not yet too late to take advantage of this rebound in the stock market.

In its view, the stock continues to offer upside potential, thanks to the favorable dynamics of the product mix, the improvement in free cash flow (FCF) and the planned ramp-up of dividend payments.

Barclays says it has always appreciated the quality of the manufacturer's management team, its solid execution capability and the improvement in its offering, which is already reflected in a firmer volume-price mix.

The analyst is particularly impressed by the latest R5, which he sees selling well, but also appreciates the new Dacia Duster as well as the rejuvenated versions of the Espace, Clio and Captur.

With a rapidly improving balance sheet structure, Renault should be in a position to redistribute 35% of its net income in the form of a dividend in 2024, he predicts.

With a PER of 4x for 2024 and a dividend yield of 8.5%, the stock is still "cheap" from Barclays' point of view, which considers it attractive enough to move to an "overweight" recommendation.

According to the professional, the share's surge has put the stock back at the heart of the strategy of investors focused on the automotive sector, which suggests that it will continue to outperform.

Renault expects to publish its Q1 sales on Tuesday April 23.

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