Renault: As of now, Renault is worth more on the stock market than its Japanese partner Nissan

(BFM Bourse) – The diamond group weighs more than 15 billion euros on the stock market compared to 14.3 billion euros for its Japanese counterpart, not necessarily helped by the weakness of the yen. But this crossing above all indicates the rebirth of the Renault stock market which Barclays is moving to “overweight”.

It’s a sign of crossing the curve but it says a lot about Renault’s “return” to the stock market. As Bloomberg said on MondayThe diamond group is now worth more on the stock market than its Japanese partner Nissan.

Renault’s market capitalization currently stands at 15.12 billion euros, and the stock increased by 1.75% this Tuesday. For its part, Nissan Motors is worth 2,356 billion yen, according to Yahoo! Silver, or about 14.3 billion euros.

Bloomberg notes that Renault has for almost the entire duration of their alliance, which began in 1999, run behind the Japanese group.

Indeed, Nissan is burdened by a weak yen, which punishes its capital once converted into dollars or euros. But we can also say that the weakness of the Japanese currency may have helped its export volume. Bloomberg also explains that the Japanese group, which has advanced by only 6% since the beginning of the year while the Nikkei 225 in Tokyo gained 19%, is facing a lack of renewal of its kind, due to the absence of hybrid models in United. Nations and increased competition in China, where Renault is not present.

>> Access our unique image analytics, and gain insights into the Business Portfolio

Analysts are more optimistic about Renault

On the contrary, the group of diamonds has been increasing since the beginning of this year. With an increase of 38.5% since January 1, the company managed by Luca de Meo easily signs the strongest development in the CAC 40.

Several analysts (Berenberg, HSBC) recently raised their price targets on the stock, citing the group’s strong cash flow as well as the arrival of a large number of new models (ten) this year that will protect its margins. Or a possible increase in the coming months of the group’s credit rating to the “investment” category by rating agencies, which would give it more room to increase shareholder returns.

This Tuesday Barclays also raised its rating from “underweight” to “overweight”, equivalent to “buy”, with the target raised to 60 euros from 36 euros previously.

The Bank of England was concerned about its financial balance sheet, its exposure to the “poor” market and about Ampere, its subsidiary dedicated to electric vehicles and software. But those concerns have “been mitigated,” he explains.

Rethinking the union

Barclays Bank is delighted for group R5, a modern and 100% electric version of the legendary model from the 70s and 80s and therefore thinks “that it will sell very well”. “We are still mixed in the large European Union market as a whole, but within it we can see Renault gaining share due to – in our opinion – the best product portfolio in the Renault and Dacia brands”, it continues to be established. “In addition, thanks to the very high cash flow and the sale of shares in Nissan, the quality of Renault’s balance sheet is improving rapidly,” he adds.

Indeed, the stock experienced a rally, but from a very low level, recalls Barclays. According to him, the stock still has potential due to its prospects for improving results, good management track record, and good products, such as a low-cost platform for electric vehicles.

Note also that Renault overtakes Nissan when the two partners have re-examined their alliance – since last autumn, and the end of shared structures, such as a joint purchasing company. This also leads to Renault’s gradual separation from Nissan’s capital. The two companies are now on par in terms of direct shares, each owning 15% of the other. The balance of Renault’s historic 43.4% stake in Nissan is held in a trust responsible for the gradual sale of shares. Sales of Nissan units took place in December and then at the end of last March. The trust now owns only about 22% of Nissan’s capital, compared to 28.4% at the beginning.

Julien Marion – ©2024 BFM Bourse