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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 50 research reports from 3 professional analysts.
Surface Transforms has issued new revenue guidance for FY24, with the company now expecting revenues in the range £17.5-22m. We are withdrawing our previous forecasts for FY24 and withdrawing our price target while we review the impact of the new guidance.
Companies: Surface Transforms PLC
Cavendish
We note the regulatory announcement this morning from Surface Transforms and withdraw our estimates and valuation, pending conversations with management.
Zeus Capital
Companies: BILN ELCO NXQ CUSN ATG
Companies: Nexteq PLC
Canaccord Genuity
Surface has issued a brief Q1 update. Production will ramp-up this year as final new equipment is installed, and manufacturing teething problems recede.
Companies: UTL ASC DNLM BWNG MONY DFS BOO
Shore Capital
16th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radical Limited for
Companies: IP BILN SAR GATC ASTO PHE SHOE CCS IP CUSN
Hybridan
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: SCE HVO VLG
On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div
Companies: PTAL GHH IGP MSLH PINE NXQ EQLS NXR AXL
Companies: GHH PHC GETB DEC LORD GELN
Companies: CPH2 ITM CNA AFC DRX IKA CWR CHAR IES AT/ HE1 ATOM
Liberum
17th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
Companies: ARS TIDE SCE SNX ECK CNS TST SPEC SSTY
Gooch has issued a positive update for H1. Trading has started to recover with stocking levels normalising at industrial and medical devices customers. The outlook is positive with growth returning, and management has confirmed our full year estimates (adjusted for the disposal of EM4). The order book and order flow appear healthy, and net debt is comfortable. Gooch clearly still has plenty to do to lift operating margins from a lacklustre 8.1%, but the transformation plan appears to be back on
Companies: Gooch & Housego PLC
Nexteq’s FY23 results show adjusted EBITDA +4% ahead of the +6% upgrade at the January trading update, record FY23 EFCF of $17.4m, and a confident outlook that leads us to reiterate our FY24E revenue and upgrade FY24E gross profit, adj EBITDA, and EFCF by +1-10%. The strategic focus on higher-margin products and customers reducing elevated inventory levels led FY23 group revenue -5% yoy to $114.3m, with Quixant 6% lower at $69.3m and Densitron 2% lower at $45.1m. Effective supply-chain managemen
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