Goldman Sachs on Wednesday raised its recommendation on Renault shares from 'neutral' to 'buy', with a price target raised from EUR51 to EUR70.

In a research note, the broker believes that the carmaker's self-imposed high pace of product launches should lead to an improvement in earnings over a 12-24 month horizon.

We believe that the ten product launches scheduled for 2024 should contribute, on a gross basis, to increases of 21.5% and 30.5% in automotive Ebit in 2024/2025 compared with 2023", it states.

In his view, many of the effects of the 'Renaulution' plan have yet to be felt.

According to his calculations, Renault could thus generate around 5.4 billion euros in free cash flow (FCF) over the 2024/2025 period, taking its net cash position to over 8.3 billion.

In the event of a full disposal of the Nissan stake, the group could even see its net cash climb to 11.4 billion euros by 2025, Goldman adds, equivalent to 76% of its current market capitalization.

Copyright (c) 2024 CercleFinance.com. All rights reserved.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.