According to the Plateforme Automobile, new passenger car registrations in France rose by 3.68% in May, but Renault Group registrations slumped by 7.61%, with Dacia down 2.95% and the Renault brand itself retreating by 10.93%. The only bright spot was Alpine, where sales surged 46.99%, though in terms of volume, it accounted for only 0.96% of the group's total sales last month.

UBS analysts believe the second quarter has started on a rather weak note for the French automaker. However, they note that June is typically the most significant month of the quarter, and Renault's unit sales performance could be bolstered by more profitable distribution channels and pricing discipline.

For the full year, the Swiss bank's analysts are forecasting an EBIT margin of 5%. Specifically, they believe that higher electric vehicle penetration, an increase in 'sales to partners', international expansion, and competitive pressures point toward a weakening financial performance.

When asked whether the group can maintain its profitability margin around 6% in the medium term, analysts answered in the negative. They even anticipate that the group's EBIT margin will trend toward 3-4% by 2028, compared to 6% in 2025.

In conclusion, UBS notes that Renault is the only manufacturer that has not (yet) experienced a sharp normalization of its profitability margin following the post-Covid period of super-profits enjoyed by the automotive industry. According to UBS, this trend is expected to intensify in 2026, primarily due to price erosion. Furthermore, analysts emphasize that in the medium term, most sales growth drivers (international expansion, Dacia's electrification, low-cost BEVs) are margin-dilutive.

The recommendation on the stock remains Sell, with an unchanged price target of 28 euros.