Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on RENAULT SA. We currently have 19 research reports from 1 professional analysts.
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Carlos Ghosn steps down as Nissan's CEO
23 Feb 17
Renault’s CEO will remain Chairman of Nissan’s Supervisory Board and CEO of both Renault and Mitsubishi, in which Nissan bought a 34% stake in 2016. Carlos Ghosn successfully restructured Nissan late in the last century, but the company has taken over a minority stake in ailing Mitsubishi and, in late 2016, Renault acquired a majority stake in loss-making Russian Avtovaz. As Ghosn’s track record has been so positive, investors believe that he can also restructure these two latest ventures so that both will eventually generate positive earnings. While the Mitsubishi numbers are consolidated at-equity by Nissan and its results at-equity by Renault, the 2016 Avtovaz balance sheet has been consolidated on 31 December 2016, but the P&L will start to burden Renault’s operating earnings from this year onwards. The Russian car producer does not expect positive operating earnings before impairments and restructuring charges before 2018.
Good results also stemming from Avtovaz and a higher dealer inventory
10 Feb 17
Renault sold a total of 3.18m vehicles (+13%) in 2016 and, as the ASP was up by 0.3% to €15,395, revenue of the Automobile division increased by 14% to €49.0bn. Consolidated revenue increased by 13% to €51.2bn and both revenue numbers were some €1.5bn below our projections. The group shows an operating result of €3.28bn (+38%) and net earnings of €3.42bn (+21%) and these numbers are €230m and €370m, respectively, higher than we had anticipated. Consequently, management proposes a dividend of €3.15 (2015: €2.40) while we had expected €2.75.
Nissan’s profit fall accelerates with yen appreciation
07 Nov 16
Car deliveries increased by a good 3% in both the last quarter and H1 (FYE 31 March) to 1.05m and 2.05m units, respectively. However, as the yen’s appreciation accelerated (its average was up by 9% from April through to May and some 15% from July through to September), Nissan’s revenue fall accelerated from -8.4% in Q1 to -12% in Q2. The same holds true for profits. EBIT was down by 9% to Y176bn in Q1 and by 19% to Y164m in Q2, i.e. expressed in euros it also fell in the last quarter. The company’s respective net earnings were -11% to Y136bn and -16% to Y146bn. As the Q2 net profit fall expressed in yen was similar to the yen’s appreciation against the euro, the at-equity contribution to Renault’s Q3 accounts should have been in the vicinity of last year’s €524m. It had been down by 23% to €749m in H1 16. Nissan’s deliveries fell by 20% to 201,942 in H1 in Japan and 0.3% to 355,466 in Europe but they were up by 8.3% to 1.06m in Nafta and 50% to 203,144 in Asia. Sharply rising volume in Asia has allowed at-equity profits (overwhelmingly from China) to increase by 32% to Y75bn. Simultaneously, exchange losses (including gains and losses from derivatives) fell from Y28bn in H1 15/16 to Y22.6bn. In spite of higher at-equity profits and lower exchange losses, net earnings were down as the operating result was lower (see comment above).
Mercedes-Benz starts pick-up production, but not for Nafta and Asia
30 Sep 16
Daimler’s CEO Dieter Zetsche stated at the Paris Motorshow that the cooperation between Daimler and Renault-Nissan has been expanded during the course of 2016. He focused on four topics: Smart cars will eventually also be available as full-electric cars using Renault’s engines and Daimler’s batteries. The Smart fortwo is to continue to be produced in Daimler’s Hambach/Alsace factory while the forfour is to be produced in Renault’s Slovenian plant along with the Renault Twingo. Daimler and Nissan have laid the foundation for a car plant in Mexico in 2015. Starting in 2017, this plant will produce premium compact cars for the Infiniti brand and from 2018 for the Mercedes-Benz brand. An all-new Mercedes-Benz pick-up will be produced in Renault’s Argentine plant and in Nissan’s Spanish plant. The car will be based on Nissan’s NP300 but, according to Daimler, will look different. It intends to sell the pick-up in all markets outside North America and Asia. We believe that this limitation is a Nissan request and wonder how many of these cars can be sold outside these two regions. A Nissan engine plant in the USA has been producing 2L, 4-cylinder gasoline engines for Daimler since 2014. This plant is currently being expanded to increase capacity. During the last two years, it has produced some 250,000 engines for Daimler and these are used in cars for the Nafta market as well as for Africa. Additionally, engine components are shipped to Germany.
Outperformance in the bag
24 Mar 17
IG Design has had a very good second half trading and has issued a year-end update indicating that numbers will exceed market estimates. We have lifted our FY17 and FY18 numbers by 8-10% at the pre-tax and EPS levels, following an 11% uplift to earnings with the interims. Particularly notable is the comment on strong cash flow, with the group reaching its target of average leverage less than 2.5x EBITDA two years ahead of plan. With the earnings and cash flow momentum, strong balance sheet and progressive dividend, there is good potential for further share price upside.
24 Mar 17
We note the share transaction yesterday, and think the stock will benefit from the increased liquidity. We continue to believe there is good valuation upside to the shares. However, we are terminating coverage of Watkins Jones from this morning and withdrawing our forecasts from the market.
Management hopes for a better 2017
21 Mar 17
BMW’s final 2016 accounts were, compared to what we had anticipated, slightly disappointing. We had said so when preliminary numbers were released earlier this month. Today’s guidance for 2017 shows slight growth in all categories, i.e. volume, revenue and consolidated pre-tax earnings are all projected to go up. Reading between the lines, the statement suggests that the EBIT margin generated by the Automobiles division is likely to fall further (it was down from 9.2% to 8.9% in 2016). Whether Financial Services can again increase its margin (it was up by 0.1pp to 8.4% last year) remains to be seen and will also depend on the price development of used vehicles.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.