In a report released today, Philippe Houchois from Jefferies downgraded Renault (0NQF – Research Report) to a Hold, with a price target of €52.00.
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Philippe Houchois has given his Hold rating due to a combination of factors impacting Renault’s financial outlook and strategic positioning. The company’s recent performance has shown signs of reaching the limits of its prior turnaround success, with expectations for 2024 and 2025 results aligning towards the lower end of market forecasts. This situation leaves little room for positive revisions, as the traditional aspects of Renault’s recovery appear to have plateaued.
Moreover, while Renault is making strides in product development and operational efficiency, the strategic challenges it faces, such as monetizing its stake in Nissan and managing partnerships with Geely, add complexity to its investment case. The company’s financial guidance for adjusted EBIT and free cash flow is close to market consensus, providing limited upside potential. Additionally, concerns over CO2 compliance and the need for further working capital inflows to meet free cash flow targets contribute to a cautious outlook, justifying the Hold rating with a price target of €52.
In another report released on February 21, Deutsche Bank also maintained a Hold rating on the stock with a €60.00 price target.