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Renault SA RNO

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Morningstar’s Analysis

Valuation
Currency in EUR
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Renault’s First-Half 2021 Back in Black as Turnaround Gains Traction; Raised FVE to EUR 86

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

No-moat rated Renault reported first-half earnings per share of EUR 1.29, EUR 1.74 ahead of the FactSet consensus for a loss of EUR 0.45 per share but a whopping EUR 28.20 over the COVID-19 impacted loss of EUR 26.91 reported last year. Renault’s results were aided by Nissan JV equity income of EUR 100 million versus a loss of EUR 4.8 billion a year ago. The French automaker publishes only half- and full-year financial statements. Due to the time value of money since our last update, we raised our fair value estimate to EUR 86 from EUR 84. For patient long-term investors willing to accept the risk of a turnaround situation, the 5-star rated shares currently trade at a compelling 63% discount to our new fair value estimate.

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Company Profile

Business Description

Renault possesses a global alliance of automotive manufacturing, financing, and sales operations. The company's alliance partners consist of AvtoVAZ (61.09%), Dacia (99.4%), Nissan (43.7%), Renault Samsung Motors (80.0%), Mitsubishi (Nissan owns 34%) and Daimler (1.55% owned by Nissan). Total 2020 Renault-Nissan-Mitsubishi alliance sales volume of 7.8 million vehicles makes the alliance the third largest vehicle group in the world, behind Toyota at 9.5 million and Volkswagen at 9.3 million vehicles sold.

Contact
13-15, quai Le Gallo, Boulogne
Billancourt, 92100, France
T +33 176840404
Sector Consumer Cyclical
Industry Auto Manufacturers
Most Recent Earnings —
Fiscal Year End Dec 31, 2021
Stock Type —
Employees 170,158

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