(Boursier.com) — Renault rose 0.9% to 35.80 euros in a market buzzing with rumors of financial operations. Citigroup thus remains ‘outperforming’ on Renault, while reducing its target from 50 to 45 euros. Citing market conditions that are “not met”, remember that the car manufacturer has decided to cancel the IPO of Ampere, its division dedicated to electric vehicles and software, which has been operating autonomously since November 1, 2023.
Renault stressed that its expected results for 2023 confirmed its ability to sustainably generate cash to finance its future, including the development of Ampere, and the group will continue to finance the development of Ampere until reaching the financial balance expected in 2025. Finally, all of the operational and financial objectives presented during the CMD dedicated to Ampère last November were fully confirmed.
For the broker Bernstein, this decision should be “a boon in the short term” for the stock insofar as it removes any doubt about a potential dilution of Renault shares with those of Ampère… However, the dynamics of the IPO having disappeared, the analyst believes that attention is now focused on the group’s prospects in a year of transition towards less brilliant performances in the automobile industry.
Pragmatism displayed
As described by the CEO of Renault, this is a pragmatic decision in the current unfavorable context, whether on the stock market or on the sectoral level (slowdown in BEV sales growth in recent months ), explains Oddo BHF (‘outperform’). Support for the IPO project was limited on the investor side, and even more so as the financial situation of the manufacturer became increasingly healthy in recent quarters and made such an operation much less essential. Faced with this, continuing the IPO process would have involved significant risks which were therefore not necessary to take…
This uncertainty surrounding the Amère IPO project having undeniably constituted a brake over the last few months for a certain number of investors, the broker believes that this decision could give new impetus to an ‘equity story’ which it considers still very attractive, and undoubtedly more readable today… On this point, the positive tone of management, yesterday, regarding the 2023 financial results (publication on 02/15), the richness of the 2024/25 product plan (ICE and BEV) and, more generally, the financial outlook constitutes short-term assets. Finally, beyond these elements, the potential entry of Aramco into Horse, the upward revision of the credit rating and a probable continuation of the sale of Nissan shares are all other catalysts in 2024 which reinforce the appeal for the stock whose valuation remains the lowest in the sector (PE less than 3x).
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