Renault Shares Rise by Nearly 3%

Renault (EPA:RENA) shares increased almost 3% on Tuesday after a positive pre-close call with analysts, ahead of the 3Q24 revenue report set for October 24.

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

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

"Volumes: -8.6% YoY decline in registration in July + August, with September being broadly in line with last year. The trend is set to reverse in 4Q24 due to new launches," said HSBC analysts in a note following the call.

They explained that pricing has entered a phase of normalization, with Renault passing on cost reductions to customers as the product mix gradually improves.

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

The company’s strong inventory management and better position regarding residuals were highlighted, with HSBC noting, "It is managing residuals carefully, currently better than peers and also up YoY for Renault and Dacia brands."

Moreover, the services arm, Mobilize, reported high double-digit growth, driven by higher interest rates, enhancing Renault’s overall performance.

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

The analysts noted that the full impact of Renault's new Duster model is expected in 4Q24 and 1Q25, with the R5 also showing promising early orders. "Orders so far are above expectations," HSBC remarked, indicating potential further gains for the company.