(News Bulletin 247) – Renault fell heavily on the stock market this Friday in the wake of an unoptimistic note from UBS, which predicted a “hard landing” for the automotive group.
In a note released this morning, analysts at the Swiss bank say they are worried about the rise of competition from Chinese manufacturers, but also from Tesla.
“With an exposure of around 70% of its sales to Europe and a market share of 10% on the continent, Renault is one of the most vulnerable players,” writes UBS.
The Swiss establishment also doubts that the proposed IPO of the group’s electric vehicle and software subsidiary, Ampere, planned for the first half of 2024, will create a lot of value for shareholders.
Finally, UBS notes that the residual activity (‘stub’) of the group – that is to say the scope remaining post-split of Ampere – is around 16 euros, well above its averages at five and 20 years old.
As a result, the bank downgrades the security to ‘sell’ against ‘neutral’ so far and sharply reduces its target price, which goes from 42 to 31 euros.
Following these comments, Renault shares fell more than 4% around 10:30 a.m. while the STOXX automobile index dropped 1.4%, UBS having also downgraded its advice on Volkswagen.
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