The French carmaker Groupe Renault (FR:RNO) reported a significant decline in its third-quarter sales volumes on Thursday, sending the shares down by over 7%. The worldwide volumes grew by 6.1% to 511,000 vehicles, compared to a 13% growth in the first half of 2023. The lower volumes were mainly due to dealers opting for fewer inventories.
Nonetheless, Renault has reaffirmed its full-year 2023 targets, with expectations of achieving a group operating margin between 7% and 8%. The company anticipates that its second-half margins will surpass the 7.6% reported in the first half.
Renault is a prominent automobile manufacturing company selling cars, light vehicles, electric vehicles (EVs), etc. The company has operations in over 130 countries worldwide.
Let’s dig deeper into the Q3 numbers.
Slowdown, But Revamp on Track
The Group’s revenue for the third quarter increased by 13.8% at constant exchange rates to €10.5 billion. Revenues modestly surpassed the consensus forecast of €10.46 billion. For the nine months of 2023, revenues grew by 25.3% at constant currency rates. The numbers were driven by improved sales of its top-end models, partially offset by currency depreciation, especially in Afghanistan and Turkey.
The global sales for the Renault brand increased by 11% in the third quarter to 357,000 units, compared to the same quarter a year ago. The company witnessed solid growth in Europe and strengthened its position as the “second-best-selling automotive brand,” with sales volume increasing by 24.8% in Q3.
Moving ahead, the company is on track for a major revamp, which includes the spin-off of its EV business, Ampere. This subsidiary is set to be listed on the market as a separate entity next year. This strategic move aims to enhance the company’s position in the EV market and help it compete with rivals such as Tesla (NASDAQ:TSLA) and Chinese EV players.
The company will announce its detailed strategy on its Capital Markets Day on November 15.
Is Renault a Buy or Sell?
Today, HSBC analyst Pushkar Tendolkar confirmed his Buy rating on the stock, forecasting a growth of 40% in the share price.
Overall, on TipRanks, RNO stock has a Moderate Buy rating backed by a total of 12 recommendations. It includes seven Buys, four Holds, and one Sell rating. The Renault share price forecast is €47.79, which is 42.5% higher than the current trading levels.
