Renault: not too late to take advantage of the rebound, says Barclays
April 09, 2024 at 06:42 am EDT
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Renault was one of the biggest risers on the CAC 40 index on Tuesday morning on the Paris Bourse, buoyed by Barclays' recommendation that it's not too late to take advantage of the stock's rebound.
Shortly before 12:30 pm, the automaker's shares gained 1.2%, while the CAC gave up around 0.4%, taking it back to new highs since 2019.
In a note released in the morning, Barclays said it had raised its recommendation to 'overweight', compared with 'in-line weighting' previously, and had raised its target price from €36 to €60.
While acknowledging that the share price has already risen by 30% over the past month, the research firm stresses that this recovery has taken place from very low levels, and believes that it is not yet too late to take advantage of this rebound.
In its view, the stock continues to offer upside potential due to the favorable dynamics of the product mix, the improvement in free cash flow (FCF) and the expected ramp-up in dividend payments.
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Renault is one of the world's leading automobile constructors. Net sales break down by activity as follows:
- sale of vehicles (91.9%): 2.2 million passenger and commercial vehicles sold in 2023, distributed by brand between Renault (1,548,748), Dacia (658,321), Renault Korea Motors (21,980), Alpine (4,328) and other (1,968);
- services (8.1%): financing services for vehicle sales (purchasing, renting, leasing, etc.; RCI Banque), related services (maintenance, warranty extension, assistance, etc.) and mobility services.
At the end of 2023, the group had 38 industrial sites worldwide.
Net sales are distributed geographically as follows: France (29.2%), Europe (49.3%), Americas (8.7%), Eurasia (6.1%), Asia/Pacific (3.5%), Africa and Middle East (3.2%).
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