RENAULT

Analysis of Renault share price

BUY   SELL
72% of retail investor accounts lose money when trading CFDs with this provider.
 
Chart provided by Tradingview

The large French companies whose shares are listed on the market represent interesting investment poles for French traders and investors. And among the most popular stocks, we regularly find big names in the automotive industry. This is the case of the Renault group, which we suggest you discover here in more detail in order to learn how to spot the most judicious events to carry out the analysis of its price.

Latest news

Renault's market cap, dividends, sales and earnings in 2020

27/10/2021 - 09h11

The Renault group had a difficult year in 2020. The Covid-19 health crisis has weighed heavily on its business during the year. As a result, the company's annual results are less attractive.

Elements that can influence the price of this asset:

Analysis N°1

First, we will be watching Renault's efforts to expand its strategic positioning from a geographical standpoint, and in particular the operations aimed at increasing its presence on emerging markets where automobile demand is booming.

Analysis N°2

As the market for clean vehicles is also booming, attention should also be paid to operations aimed at creating new electric or hybrid vehicle models by the brand.

Analysis N°3

Still on the subject of indicators to be monitored as part of a fundamental analysis of this stock, we will follow with interest the data coming from the competition in this sector with the publications and results of the main car manufacturing groups.

Analysis N°4

News from the Nissan group, to which Renault is closely linked, also has an impact on the share price and should be followed closely.

Analysis N°5

We will also be able to monitor the cost of financing vehicle purchases in the countries where Renault markets its products most, which will have an impact on orders.

Analysis N°6

Finally, the company's financial results should be systematically checked against quarterly and annual publications and targets.

72% of retail investor accounts lose money when trading CFDs with this provider. This is an advert for trading CFDs on Plus500

General presentation of Renault

Renault owes its strong popularity in France and abroad to the fact that it was for a long time the leading European manufacturer of French vehicles. Unfortunately, it has now been dethroned by its direct competitor, the PSA group. However, Renault is ranked eighth in the world.

The Renault brand was created just after the Second World War, at the end of the last century. At that time, the Renault company was considered a true emblem of post-war reconstruction and of French social and economic success.

Renault was privatized in 1990, but it was not until 1996 that the privatization was actually implemented. It was at this time that the French state sold most of its shares to private investors. However, today the state still holds 15% of Renault's shares. Later, in 1999, Renault merged with the Japanese manufacturer Nissan.

Just after the PSA group (Peugeot-Citroën), the Renault group is the second largest French car manufacturer. Its global turnover is defined by various activities, including of course mainly the sale of cars, but also services such as financing, warranties or other maintenance services.

With no less than 32 production sites around the world, it has 121,807 employees and is developing its business in Europe, America and Asia.

Analysis of Renault share price
72% of retail investor accounts lose money when trading CFDs with this provider. This is an advert for trading CFDs on Plus500

The major competitors of Renault

Let's now discover the economic and sectoral environment of the Renault group with a general presentation of all the competitors of this French car manufacturer.

Volkswagen 

First of all, we must of course take into account the competition from the Volkswagen Group, which is a German car manufacturer created by the German Labour Front under Adolf Hitler. For some years now, the Volkswagen group has been the world's leading manufacturer in terms of the number of vehicles sold per year.

Toyota

The Toyota Motor Corporation group is a Japanese-based car manufacturer and also one of the leaders in the automobile sales sector worldwide. In fact, it is the most profitable in terms of sales in this sector. According to the Forbe Global 2000 ranking, Toyota was in 2017 the tenth largest company in the world. It is also worth noting that Toyota is in 2021 the largest car manufacturer in terms of market capitalization.

General Motors

Of course, the competition from the American car manufacturer General Motors, also known as GM, will also be considered here. The latter is based in Detroit, Michigan, in the United States, and owns some 15 different vehicle brands. In the past, General Motors was the largest car manufacturer in the world from 1931 to 2005 and again in 2011.

Hyundai Motors Group

This other car manufacturer belongs to the Korean conglomerate and is currently the only independent manufacturer in this sector in South Korea, where it is of course the number one.

Ford

Still among the major competitors of the Renault group, we find the Ford Motor Company or FMC which is an American car manufacturer based in Dearborn in the suburbs of Detroit, Michigan.

Honda Motor Co

Finally, the last competitor you should definitely keep an eye on in your Renault share price analysis is Honda Motor Co which is a Japanese car manufacturer that also produces motorcycles, quads, scooters, business aircraft, electric generators, boat engines and gardening and DIY equipment. It is, of course, one of the world's leading manufacturers in this sector.


The major partners of Renault

The Renault group is constantly seeking to create targeted partnerships with certain competing or complementary companies in order to maintain its position on the automotive market.

Elf

For a much longer time, Renault has had a partnership with the Elf brand of lubricants, a subsidiary of theTotalEnergies group, for the promotion of these products.

Mitsubishi

In 2015, the Renault group had also tried to create a partnership with the car manufacturer Mitsubishi, but eventually, the contract will be cancelled. This partnership aimed for Renault to provide three-box sedans to the Japanese group for its North American market.

PSG Football Club

More recently, in 2019, the Renault group also established a partnership with the PSG football club. This commercial partnership has resulted in the launch of a special series of the Mégane Gt-Line brand with a style reminiscent of the club's and an associated advertising campaign that is widely distributed on various media.

72% of retail investor accounts lose money when trading CFDs with this provider. This is an advert for trading CFDs on Plus500
The factors in favour of a rise in the Renault share price:

One of the greatest advantages of the Renault company is undoubtedly its position on the world car manufacturing market. Renault is currently the fourth largest manufacturer in the world and has a share of almost 10% of the world's cars, thanks to its Renault brand vehicles, but also to the Dacia and Renault-Samsung brands.

Another strong point is the company's effective strategy for developing its activities around the world, with an excellent distribution of activities between Europe, Russia, Turkey, Algeria and Latin America for the Renault brand, and in Europe and Asia for the Nissan brand.

The Renault group has shown strong growth in recent years. This is largely due to the low-priced entry-level vehicles offered by the Dacia Entry range. Renault has also been able to increase its growth by winning new market share abroad, particularly in India, China, Japan and Brazil, where it generates more than half its sales.

Renault is strategically well positioned in the Asian production market, which is highly prized by its main competitors. In particular, it has doubled its production capacity in South Korea, with an upturn in European registrations, which has enabled it to make real savings on costs. The group has also pooled the production facilities of its Nissan subsidiary with the Renault branch, once again helping to lower production costs and improve competitiveness. Thanks to this strategy, the group achieved an operating margin of 5.7% in 2015 and demonstrated its ability to control its distribution flows by sharply reducing its inventories.

Still in terms of international growth, the Renault group currently has a clear advantage over its competitors, since it was the very first car manufacturer to take advantage of the opening of the Iranian market.

Another major strength of the Renault group this time concerns its financial engineering, particularly with the successful share buyback of Nissan in 2016, which allowed the group to retain a large part of the shares of this subsidiary while generating several billion euros in 2016.

Thanks to its financial strategy and its efforts to reduce its debt, Renault should finally benefit from a rating upgrade by the main rating agencies and thus gain more confidence from investors.

Finally, investors who buy Renault shares also appreciate the direct distribution of dividends from the various holdings to the group's shareholders.

The factors in favour of a drop in the Renault share price:

Firstly, it must be acknowledged that the introduction of the Entry range has not only brought benefits to the Renault group. It has indeed damaged the group's image and this new range could, in the long term, cannibalise the Renault and Dacia brands in the countries where the group is historically present. This new range also obliges Renault to increase its sales volumes considerably.

It is also noted that Renault brand vehicles generate insufficient profitability compared to Nissan brand vehicles, which could pose a problem in the longer term.

Another threat that the group will have to face in the coming years is the crisis in the automotive market in Russia, Brazil and Latin America, which is currently showing a strong decline.

Investors are also rather cautious about the success of the Renault group's strategy to develop all-electric vehicles, knowing that this market is considered very promising but also extremely competitive in a context of contestation of the validity of the anti-pollution systems of diesel cars in Europe and a willingness of governments to promote the purchase of clean vehicles.

Of course, it is also necessary to talk here about Renault's brand image, which has been heavily damaged by the Carlos Ghosn affair that shook the stock at the end of 2018 and the beginning of 2019. The head of the group is indeed accused of significant tax fraud and this has created many conflicts with the head of Nissan, putting a strain on this association between the two brands.

Strong, higher than expected demand coupled with high launch costs could also weigh on Renault's medium and long-term profitability.

Finally, we should also point out that the Renault group regularly faces conflicts between the company's board of directors and the French state, which is still a shareholder in the group.

Although the Renault group shows some weaknesses here, it is important to take them into account in addition to its qualities before taking a position on this stock.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

On which stock exchanges are Renault shares listed?

Renault shares are currently listed on the Paris Stock Exchange, i.e. on the Euronext market. It was first listed on November 17, 1994, when the company decided to open up its capital. At the time of this public offering, the price of a Renault share was 165 francs or 25.15 euros. More precisely, this share is listed in compartment A of this stock market, i.e. in the section for companies with the highest capitalization.

On which stock market indices can Renault shares be found?

Of course, as you probably already know, Renault shares are currently included in the French benchmark CAC 40 stock market index, and have been since February 9, 1995, because they are one of the 40 French companies with the largest capitalization. But this is not the only index that takes into account the value of this share, since the Renault group is also part of the composition of other stock market indices such as the SBF index, the Euronext index, the Euronext Auto index, among others.

What has been the historical performance of the Renault share?

To know how the Renault share is likely to evolve in the more or less long term, you need to know its history and, more precisely, the record levels it has reached since its first quotation. For example, the lowest price was recorded in March 2009 at €10.56 while the highest price was recorded in July 2007 at €122.87.

72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. This is an advert for trading CFDs on Plus500