(News Bulletin 247) – According to Bernstein, the company held a telephone briefing ahead of the publication of its third quarter earnings, sending a reassuring message. The manufacturer’s shares, which had been penalized by the profit warnings of its rivals, are gaining ground again.

Investors were starting to worry about Renault in recent sessions. The diamond group had not delivered any announcement justifying their anxiety. But the cascading profit warnings from its competitors Volkswagen, Stellantis, Mercedes-Benz, BMW and Aston Martin, all occurring last month, ended up catching up with the Boulogne-Billancourt group on the stock market.

Renault shares fell by more than 10% last week, marked by the heavy “profit warning” from its rival Stellantis.

Certainly, Renault has the double advantage of being present neither in China nor in the United States, a region which harms German groups and premium brands due to strong local competition, nor in the United States, where high stocks penalize Stellantis but are also starting to be important on the Ford side.

This did not prevent investors from fearing difficulties from the diamond group. “The fall in the stock is probably due to the fact that the market fears a profit warning from the group. Because, apart from Ferrari, they are the only ones not to have lowered their outlook,” explained last week to BFM Stock market Adrien Brasey, analyst at the Alphavalue research office.

Objectives confirmed

But this Tuesday the action regained momentum, climbing 4% around 3:30 p.m., which constituted the largest increase in a CAC 40 in small form (-0.6%). According to Bernstein, the company held a brief conference call Tuesday morning ahead of the release of its third-quarter revenue, scheduled for October 24.

“After the warnings on results recently launched by the entire sector, Renault was reassuring and reiterated its forecasts for the current year,” writes the research office.

For 2024, Renault plans to generate an operating margin of at least 7.5% and free cash flow of at least 2.5 billion euros.

Bernstein, in his notes, underlines that the group’s volumes in the third quarter should be slightly negative, due in particular to an unfavorable base effect in the third quarter which should be reversed in the fourth. The “product mix” (the impact of the orientation of sales towards more expensive and better-margined models) should increase slightly. The financial services division, Mobilize Financial Services, could post double-digit revenue growth.

Regarding products, Bernstein reports that the electric R5 has received a good reception from the press and that the level of first orders exceeds the company’s expectations. “But real success will only be visible in the first half of 2025,” writes Bernstein.