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Investing.com -- UBS sees limited near-term upside for Renault (EPA:RENA) shares following the automaker’s first profit warning in years, which sent the stock down 18%.
The revised 2025 guidance, with an EBIT margin of around 6.5% (down from more than 7%) and free cash flow of €1–1.5 billion (vs €2 billion previously), suggests “high-single digit consensus EBIT downgrades,” UBS said.
But the sharp selloff reflected more than just the numbers, according to the bank.
“We think the bigger share price move can be explained by (1) an inflection in the trend with the first profit warning in years, (2) profitability margin starting to normalize like any other OEMs, (3) profit warning issued right after the departure of the former CEO Luca de Meo,” analysts wrote.
The note also flagged investor unease around the interim leadership and delays to Renault’s new strategy. “Some investors were hoping for rapid transition,” UBS said, adding that uncertainty remains around the “Futurama” mid-term plan that had been slated for release before year-end.
Renault has said it expects a stronger second half, but UBS struck a cautious tone.
“Some investors might doubt it will be achieved,” analysts wrote, citing industry-wide commercial pressure and historical misses by peers with similar H2 targets.
Despite a strong order book and solid product line-up, UBS remains Neutral on the stock with a €44 price target.
“Post yesterday’s move, we think the shares are likely to trade sideways until there is clarity on the new management team, the plan regarding Futurama and initial market data for H2,” the bank said.