Renault shares higher after call with analysts

Investing.com -- Renault (EPA:RENA ) shares rose almost 3% on Tuesday following a positive pre-close call with analysts, ahead of the company’s 3Q24 revenue report scheduled for October 24. 

The automaker reaffirmed its full-year 2024 guidance, boosting investor confidence.

During the call, Renault highlighted that although volumes were weak in 3Q, they are expected to improve in 4Q, supported by new vehicle launches. 

"Volumes: -8.6% YoY decline in registration in July + August, September broadly in line with last year. Trend to reverse in 4Q24 supported by new launches," said HSBC analysts in a note following the call.

They explained that the company also discussed pricing, which has entered a phase of normalization. Renault is said to be passing on the benefits of cost reductions to customers while the product mix is gradually improving. 

According to HSBC, the company noted, “Geography mix slightly negative, product mix gradually improving and will continue in 4Q."

Renault’s strong management of inventory and its better-than-peers position regarding residuals were also highlighted. "It is managing residuals carefully, currently better than peers and also up YoY for Renault and Dacia brands," added HSBC.

In addition, the company’s services arm, Mobilize, saw high double-digit growth, driven by higher interest rates, providing a boost to Renault’s overall performance.

HSBC maintained its Buy rating and target price of EUR58.0 on Renault, reflecting a potential 57% upside for the stock. 

The analysts noted that the full impact of Renault's new Duster model will be seen in 4Q24 and 1Q25, with the R5 also showing promising early orders. "Orders so far [are] above expectations," HSBC said, signaling potential further gains for the company.

 

Source: Investing.com