In a research note, the analyst acknowledges that the French automaker has executed its strategy well in recent years, often outperforming its competitors, while also benefiting from positive developments such as an upgrade in its credit rating.

However, the stock price has not followed suit and has failed to reflect the expected revaluation, the note argues—a disappointment the financial intermediary attributes to the prospect of a number of strategic challenges that could weigh on profitability.

Electrification of the lineup, pricing pressures, and ambitions for international expansion are, in the analyst's view, all factors that could penalize the group's margins, even though the target of an operating margin of around 6.5% in 2025 is seen as achievable and impressive compared to most European competitors, including premium automakers.

And while Renault remains relatively spared from certain unfavorable trends affecting the sector—such as tariffs, industrial overcapacity, and direct exposure to the Chinese market—competition in the European market, particularly from Chinese manufacturers, is intensifying. Furthermore, the electrification of low-cost brands like Dacia could also weigh on profitability, the analyst continues.

In short, the stock's valuation remains low, at around 4.2 times expected 2026 earnings, which makes the share attractive on paper. Yet, the inability of the stock to benefit from all these favorable factors clearly illustrates, in the analyst's view, the caution prevailing in the automotive market in light of potential future margin pressures.