Renault : up sharply after a positive note from HSBC
April 04, 2024 at 05:40 am EDT
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Renault shares were the biggest gainers on the Paris Bourse's CAC 40 index on Thursday, following a positive note from HSBC, which believes that the French carmaker's potential remains undervalued.
The British bank raised its price target for the French automaker from 47 to 57 euros, representing a potential upside of 20%, while reiterating its buy recommendation.
At around 11:25 a.m., Renault shares were up 3.7%, compared with a 0.2% gain for the CAC and a 1% rise for the European sector index, the STOXX Europe 600 Automobiles & Parts.
In a note published in the morning, HSBC said it still saw room for growth in Renault's share price, despite its clear outperformance since the start of the year (+29%, compared with +17% for the sector).
The London-based bank particularly welcomed the group's commitment to improving shareholder remuneration, which could eventually result in a payout ratio of 35%, compared with 17.5% last year.
HSBC also warns that, while the group is perceived as a loser in the electrification movement, to the benefit of its Chinese competitors, the situation is quite different, pointing out that the automaker is preparing to launch an electric Twingo in 2026, priced at less than 20,000 euros.
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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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