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Ampere’s CMD was the opportunity for Renault to reassure investors on its near-term EV game plan. Ampere expects a FCF breakeven in 2 years with 300k units and an implied revenue per car of €33k. The BEV-ICE price parity was also on the menu but expected by 2027-28 as costs are slashed by 40%. Renault presented its interpretation of the “<€20k BEV”, thus joining Stellantis in frontrunning Tesla in the people’s car segment. The IPO window for Ampere was maintained.
Companies: Renault (RNO:EPA)Renault SA (RNO:PAR)
AlphaValue
Renault’s Q3 23 results (only revenues) slightly missed consensus expectations on the back of a weaker-than-expected volume effect, stemming from a voluntary destocking at dealerships, despite a pricing effect beating expectations. However, we expect limited changes to the FY23 consensus as Renault confirmed its guidance with profitability seen at the upper end of the range. We confirm our positive rating, believing that this miss on the top line does not reflect the underlying structural improv
The guidance upgrade was not enough. Renault posted H1 23 figures significantly above what it targeted only a month ago, therefore making delivery of the FY23 guidance an easier play. Market conditions in H1 were a clear support for numerous OEMs. However, we believe that Renault’s portfolio turnaround has a huge potential to deliver structural improvements on top. Bear in mind that the bulk of the renewal of the model lineup is coming next year. We keep our Buy rating.
Renault upgraded its FY23 margin and FCF guidance sending a positive message on the margin profile and the welcome of its new product range. This was backed by the strong product mix and lower headwinds on variable costs. Consensus’ prudence is likely to remain for FY24E as the first impacts of the price war have yet to reflect on Renault’s and peers’ P&L. However, it puts 2025 targets within reach. Ampere’s IPO is still on the table but rather for early FY24.
Renault has drawn up the guidelines for the future of its premium brand Alpine. This is a high-risk plan aiming at succeeding where Renault repeatedly failed (expanding in the premium segment, expanding globally, and getting recognition) but targeting the right trends, in our view. Though, we do not expect investors to buy into Renault shares on the back of this Alpine-specific teaching, given the shorter-term worries on the health of demand for autos, and the prospective IPO of Ampère.
Renault organised a tech session to showcase its vision of the SDV (Software-Defined Vehicle). This not-so-futuristic architecture should not only decrease development costs and times but also allow for revenues from services during the lifecycle of the vehicle. In our view, Renault’s approach appears very much consistent and well dimensioned with its overall “horizontal diversification” strategy. While the first SDV will be a van in 2026, its upcoming BEV offer already embarks building blocks o
Renault’s Q1 23 results beat the street’s estimates on the back of welcome outperformance in terms of volumes, product mix and price mix. Unsurprisingly, the guidance was confirmed but concerns over the sustainability of BEV prices remained an overhang for investors as Tesla is becoming increasingly aggressive. While we continue to find the Renault restructuring equity story compelling, we acknowledge that, in the short term, the weakness in the share price could continue until any impact or non
Renault’s FY22 results beat the street expectations on both sales and margin, and were close to our above-consensus forecast. The company symbolically resumed its dividend payment to signal its confidence in future FCF generation, but we like that the investment grade rating remains the top priority. The FY23 outlook matches the long-term plan and includes a cautious margin step-up. The order book remains high and the company refrained from entering roller coaster pricing “à la Tesla”. Our FY23
The reshaping of the Renault-Nissan-Mitsubishi alliance has been officialised. The companies have defined a legal framework to their cooperation that lacked details and let the door open for disappointment by stakeholders. Renault is not in a hurry to divest Nissan shares. The latest announcements support Ampere’s valuation which remains highly tied to Nissan’s say. Other projects announced mainly highlight that the three companies are set to continue their operational partnerships. They still h
The complexity of dealing with the Alliance have been weighing on Renault’s valuation for years but what if Renault leverages its knowhow in managing partnerships BU by BU? The last CMD of the “Renaulution” was all about reaching scale on each of the group’s businesses with an expected settlement of two new (but already well-equipped) entities (AMPERE and HORSE). Despite ambitious but credible financial targets, we wait for Nissan’s decision to get the full picture of this unique sprawling struc
Renault’s Q3 22 sales figures came in bang in line with consensus estimates. Key worries from investors have yet to be addressed/materialised into figures, i.e. the risk of worsening demand for 2023, the risk of pressure on cash flow (sole indication is the confirmed FY22 guidance) and, most importantly, the future of the Alliance (likely to be a key topic at the CMD to be held on 8 November). We plan minor changes to our figures following this release.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Renault. We currently have 48 research reports from 2 professional analysts.
AFC has made strong progress with products and its manufacturing strategy. Despite heavy investment, the cash position, at £27.4m, was slightly better than our estimate for £26.9m, demonstrating good discipline. The monthly cash burn rate (at c. £1.3m) is tracking in-line with our expectations. Generally, we maintain our estimates for significantly increased sales in FY24e and FY25e, with the cash position unchanged. Recent news on commercial progress has been positive. The 30kW H-Power Generato
Companies: AFC Energy plc
Zeus Capital
Spectra Systems (SPSY) has an excellent record in growing profits through its highly regarded technology and relationships with key clients, which include a prominent global central bank. Now, the company is ready for the next stage, and we see the acquisition of Cartor Security Printers as a game-changer in enhancing its ability to continue, and potentially accelerate, this momentum, even as it continues to benefit from a near-term, multi-million-dollar sensor refresh programme with a long-term
Companies: Spectra Systems Corporation
WHIreland
The group’s year-end update flags trading ahead of expectations, achieved by strong growth in its Systems division, with the earlier than expected delivery of a NATO contract just prior to the year-end that pulls forward profit into FY24 making it a record year. Components continue to see a normalisation of orders and slower demand as previously flagged. Order cover is strong and further opportunities in the defence/security sector are leading to investment in Integrated Systems capabilities. Re
Companies: Solid State plc
Cavendish
Today’s trading update confirms FY24E profitability above the top end of previously guided range, with positive trading momentum building into FY25.
Companies: Revolution Beauty Group plc
2023 was a challenging year for Tandem, with cost-of-living pressures impacting demand for many of the group’s products. This led us to downgrade our forecasts several times during the year (including in December), and today’s results are largely in line with those revised projections – revenue -17% YoY to £22.2m and an adj. LAT of -£1.0m (our forecast of -£0.9m). FY24E looks more positive, however: economic pressures are easing for consumers (inflation is falling, interest rate cuts are expecte
Companies: Tandem Group plc
Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. This morning, the group has provided a trading update for the year ended 31 March 2024, reporting the earlier than expected delivery of specific contracts within its Systems division and resulting in the group's FY 2024E revenue and PBT outturn anticipated ahead of our forecasts, with a commensurate decrease in our FY 2025E estimates. The delivery of these contr
Companies: FOG TND BVXP ACC HDD
Encouraging FY23 results from SPSY this morning show profits and cash a touch ahead of expectation and position the company well for a year of strong growth in FY24E. SPSY leads the market in machine-readable high speed banknote authentication, brand protection technologies and gaming security software. The company grew the business robustly in FY23 (PBTA +6%, EPS pared by increased tax payments, progressive DPS), building on a decade of double digit CAGR; and closed the year with the transfor
Liberum
Companies: LPA SOLI NANO QTX
Finals from the leader in machine-readable high-speed bank note authentication, brand protection technologies, security printing, and gaming software, in line. FY23’s stand-out feature was December’s acquisition of Cartor Holdings, the security printing business. As discussed at the time, this has moved Spectra’s Fusion polymer substrate proposition substantially forward, strengthens its competitive position and provides access to state of the art manufacturing facilities. Extending up the suppl
Allenby Capital
While revenue fell short of expectations due mainly to self-tan weakness, progress on margins, cost synergies and efficiency enabled BAR to deliver a reduction in H1 losses. While growth and profitability in other high margin brands has progressed, Skinny Tan trading is not expected to improve until next year. With synergy benefits having mostly annualised, lower sales forecasts impact the timing of the inflection to profit. We now assume losses both this and next year, albeit net cash is mostly
Companies: Brand Architekts Group plc
Singer Capital Markets
Companies: Portmeirion Group PLC
Shore Capital
Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.
Companies: Dowlais Group PLC
Edison
Companies: IG Design Group plc
Canaccord Genuity
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