Renault SA (RNO.PA) | Investment Case

1. Company Snapshot

1.a. Company Description

Renault SA designs, manufactures, sells, and distributes vehicles in France and internationally.The company operates through Automotive, AVTOVAZ, Sales Financing, and Mobility Services segments.It offers passenger and light commercial, and electric vehicles primarily under the Renault, Dacia, Renault Samsung Motors, Alpine, LADA, Jinbei & Huaasong, and Eveasy, as well as under the Nissan, Datsun, and Infiniti brands.

The company also sells powertrains and used vehicles, and spare parts; and provides various services, including vehicle sales financing, rental, maintenance, and service contracts.In addition, it offers finance for the purchase on inventories of new and used vehicles, and replacement parts; designs, produces, and sells converted vehicles; Renault EASY CONNECT for Fleet, a connected service for business users; and produces driving aids, such as steering-wheel mounted accelerators and brakes, multifunction remote control units to operate indicators, lights and horns, pedal transfers, etc.; and manual or electric swivel seats.Renault SA was founded in 1898 and is based in Boulogne-Billancourt, France.

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1.b. Last Insights on RNO

Breaking News: Renault SA shares rose after Trump announced plans to relax fuel-economy rules. The automaker, along with Porsche Holdings and Mercedes, saw gains following the news. Trump aims to change rules regulating vehicle fuel efficiency. Renault's recent earnings release showed a strong performance. Analysts at UBS recommend a buy, citing improved profitability. Those at Goldman Sachs advise a hold, citing cautious outlook. Meanwhile, analysts at Deutsche Bank have a sell recommendation, citing concerns over competition. Renault's strategy to focus on electric vehicles may help mitigate risks.

1.c. Company Highlights

Last Price	37.2
Change Percentage	0.51%
Open	37
Previous Close	37.01
Market Cap ( Millions)	10783
Volume	1064006
Year High	53.26
Year Low	30.87
M A 50	34.77
M A 200	39.42

FCF Yield	10.42%
Dividend Yield	5.91%
ROE	-46.73%
Debt / Equity	352.49%
Net Debt / EBIDTA	-1066.58%
Price To Book	0.51
Price Earnings Ratio	-0.87
Price To FCF	9.59
Price To sales	0.19
EV / EBITDA	-12.91

2. Transcript Summary

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3. NewsRoom

European Automakers Shares Climb After Trump Commits to Relax Fuel-Economy Rules

Dec -04

Source:

Gucci Hires CFO From Automotive Industry, Valérie Leberichel Has Exited Brand

Dec -01

Source:

Gucci Hires CFO From Automotive Industry, Valérie Leberichel Has Exited Brand

Dec -01

Source:

Gucci brings in former Renault executive as CFO

Dec -01

Source:

Looking at the Changing Narrative for Renault as Industry Pressures and New Strategies Emerge

Nov -27

Source:

Renault backs EU-wide local content rules with flexible approach – report

Nov -25

Source:

European car sales rise 4.9% in October, ACEA says

Nov -25

Source:

Nexans appoints Vincent Piquet as Chief Financial Officer

Nov -24

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.92%)

6. Segments

Automotive (excluding AVTOVAZ)

Expected Growth: 4%

Renault SA's automotive segment (excluding AVTOVAZ) growth is driven by increasing demand for electric vehicles, expansion in emerging markets, and strategic partnerships. The company's focus on innovative technologies, such as hybrid and plug-in hybrid models, also contributes to growth. Additionally, Renault's efforts to improve operational efficiency and reduce costs support its growth momentum.

Sales Financing

Expected Growth: 3%

Renault SA's 3% sales financing growth driven by increasing demand for electric vehicles, expansion into emerging markets, and strategic partnerships with fintech companies, enhancing customer financing options and experiences. Additionally, Renault's digitalization efforts and investments in data analytics improve risk assessment, allowing for more competitive financing offers.

Mobility Services

Expected Growth: 5%

Renault's Mobility Services growth is driven by increasing urbanization, government regulations promoting eco-friendly transportation, and rising demand for flexible, on-demand mobility solutions. Additionally, investments in digital platforms, partnerships with mobility providers, and expansion into new markets are contributing to the segment's growth.

7. Detailed Products

Passenger Cars

Renault offers a wide range of passenger cars, from city cars to SUVs, sedans, and hatchbacks, designed for comfort, safety, and performance.

Light Commercial Vehicles

Renault provides a variety of light commercial vehicles, including vans, pickups, and trucks, designed for business and professional use.

Electric Vehicles

Renault offers a range of electric vehicles, including city cars, hatchbacks, and SUVs, designed for eco-friendly and sustainable transportation.

Hybrid and Plug-in Hybrid Vehicles

Renault provides a range of hybrid and plug-in hybrid vehicles, combining fuel efficiency and reduced emissions.

Renault Trucks

Renault offers a range of heavy-duty trucks, designed for long-haul transportation, construction, and logistics operations.

Buses and Coaches

Renault provides a range of buses and coaches, designed for public transportation, tourism, and school transportation.

Renault Energy Services

Renault offers a range of energy services, including charging solutions, energy storage, and smart grids.

Renault Software and Services

Renault provides a range of software and services, including connected car services, fleet management, and data analytics.

8. Renault SA's Porter Forces

Forces Ranking

Threat Of Substitutes

Renault SA faces moderate threat from substitutes, as customers have limited alternatives to traditional fossil fuel-based vehicles. However, the growing popularity of electric vehicles and alternative modes of transportation pose a moderate threat to the company's market share.

Bargaining Power Of Customers

Renault SA's customers have limited bargaining power due to the company's strong brand reputation and wide distribution network. Additionally, the company's focus on innovation and customer experience reduces the bargaining power of customers.

Bargaining Power Of Suppliers

Renault SA's suppliers have moderate bargaining power due to the company's dependence on a few key suppliers for critical components. However, the company's large scale of operations and diversified supply chain mitigate the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low for Renault SA due to the high barriers to entry in the automotive industry, including significant capital requirements and regulatory hurdles. Additionally, the company's established brand reputation and distribution network make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry in the automotive industry is high, with many established players competing for market share. Renault SA faces intense competition from global players such as Volkswagen, Toyota, and General Motors, which puts pressure on the company's pricing, innovation, and marketing strategies.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	68.94%
Debt Cost	3.95%
Equity Weight	31.06%
Equity Cost	12.40%
WACC	6.57%
Leverage	221.96%

11. Quality Control: Renault SA passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Mercedes-Benz

A-Score: 6.3/10

Value: 8.9

Growth: 4.9

Quality: 3.3

Yield: 10.0

Momentum: 3.5

Volatility: 7.3

1-Year Total Return ->

Porsche

A-Score: 6.0/10

Value: 9.0

Growth: 2.6

Quality: 7.2

Yield: 6.9

Momentum: 2.5

Volatility: 7.7

1-Year Total Return ->

A-Score: 5.6/10

Value: 1.8

Growth: 5.7

Quality: 6.7

Yield: 4.4

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

Redrow

A-Score: 4.9/10

Value: 6.7

Growth: 3.8

Quality: 7.4

Yield: 4.4

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

Renault

A-Score: 4.7/10

Value: 9.5

Growth: 5.0

Quality: 2.3

Yield: 4.4

Momentum: 3.0

Volatility: 4.0

1-Year Total Return ->

Volvo Car

A-Score: 3.1/10

Value: 7.3

Growth: 4.9

Quality: 3.3

Yield: 0.0

Momentum: 2.5

Volatility: 0.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.93%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.57%

Renault SA - FR0000131906

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on RNO

1.c. Company Highlights

Strong Momentum

Lower Quality

Cheaper

Stable Momentum

Lower Growth

Medium Volatility

Revenues Beats

Earnings Miss

Average Growth

Average Quality

Average Yield

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.92%)

6. Segments

Automotive (excluding AVTOVAZ)

Expected Growth: 4%

Sales Financing

Expected Growth: 3%

Mobility Services

Expected Growth: 5%

7. Detailed Products

Passenger Cars

Light Commercial Vehicles

Electric Vehicles

Hybrid and Plug-in Hybrid Vehicles

Renault Trucks

Buses and Coaches

Renault Energy Services

Renault Software and Services

8. Renault SA's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Renault SA passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

37.2$

Current Price

37.2$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA