Renault shares rally as investors cheer dividend jump By Reuters
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© Reuters. FILE PHOTO: A logo of Renault is seen on a car displayed during Renault Group capital market day for its new electric vehicle unit Ampere, in Paris, France, November 15, 2023. REUTERS/Gonzalo Fuentes/File Photo
By Amanda Cooper
LONDON (Reuters) – Shares in Renault (EPA:) hit two-month highs on Thursday after the French carmaker posted full-year 2023 net profit slightly below forecasts but reported margin and revenue gains and a huge dividend increase.
Late on Wednesday the company said it would propose a dividend of 1.85 euros ($1.98) for 2023, up from 0.25 euros for 2022, joining U.S. automakers Ford (NYSE:) and General Motors (NYSE:) in giving more cash to investors.
Renault shares were last up 4.2% at 38.18 euros, having touched their highest since mid-December, compared with a 0.9% rise in Paris’ benchmark .
Meanwhile, rival Stellantis (NYSE:) said on Thursday it had approved a share buyback worth up to 3 billion euros, helping send its shares to a record high in Milan despite its waring of a turbulent 2024.
Renault Chief Financial Officer Thierry Pieton told an analyst call on Thursday that car prices will have a “slight positive” effect on the company’s 2024 results, but not as much as in 2023.
The company posted an operating margin of 7.9%, up from 5.5% in 2022. The company said it expected an operating margin of about 7.5% this year and stood by its target of double-digit margins by 2030.
“Investors will be looking out for any more details on Renault’s plan to sell more Nissan (OTC:) shares in 2024, and how they plan to use that cash,” Bernstein analysts said.
“We would be keen to understand where management sees demand for the current year … and what gives them confidence to expect a decent performance.”
Renault’s Pieton added that raw material prices turning positive in the second half of the year would continue to help in 2024.
“We read the 7.5% group margin as a floor for 2024 and believe the firm will be able to improve the group margin year-on-year supported by another year of reaping the benefits of the strong product cycle, pricing power and reduction in the cost base,” JP Morgan analysts said in a note.
Morgan Stanley were similarly upbeat, but injected a note of caution.
“We think investors will view this OP margin guidance as very attractive and could look to re-rate the shares more
permanently as the balance sheet improves and management execution continues,” they said.
“The key risk is if European pricing weakens from here,” they added.
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© Reuters. FILE PHOTO: A logo of Renault is seen on a car displayed during Renault Group capital market day for its new electric vehicle unit Ampere, in Paris, France, November 15, 2023. REUTERS/Gonzalo Fuentes/File Photo
By Amanda Cooper
LONDON (Reuters) – Shares in Renault (EPA:) hit two-month highs on Thursday after the French carmaker posted full-year 2023 net profit slightly below forecasts but reported margin and revenue gains and a huge dividend increase.
Late on Wednesday the company said it would propose a dividend of 1.85 euros ($1.98) for 2023, up from 0.25 euros for 2022, joining U.S. automakers Ford (NYSE:) and General Motors (NYSE:) in giving more cash to investors.
Renault shares were last up 4.2% at 38.18 euros, having touched their highest since mid-December, compared with a 0.9% rise in Paris’ benchmark .
Meanwhile, rival Stellantis (NYSE:) said on Thursday it had approved a share buyback worth up to 3 billion euros, helping send its shares to a record high in Milan despite its waring of a turbulent 2024.
Renault Chief Financial Officer Thierry Pieton told an analyst call on Thursday that car prices will have a “slight positive” effect on the company’s 2024 results, but not as much as in 2023.
The company posted an operating margin of 7.9%, up from 5.5% in 2022. The company said it expected an operating margin of about 7.5% this year and stood by its target of double-digit margins by 2030.
“Investors will be looking out for any more details on Renault’s plan to sell more Nissan (OTC:) shares in 2024, and how they plan to use that cash,” Bernstein analysts said.
“We would be keen to understand where management sees demand for the current year … and what gives them confidence to expect a decent performance.”
Renault’s Pieton added that raw material prices turning positive in the second half of the year would continue to help in 2024.
“We read the 7.5% group margin as a floor for 2024 and believe the firm will be able to improve the group margin year-on-year supported by another year of reaping the benefits of the strong product cycle, pricing power and reduction in the cost base,” JP Morgan analysts said in a note.
Morgan Stanley were similarly upbeat, but injected a note of caution.
“We think investors will view this OP margin guidance as very attractive and could look to re-rate the shares more
permanently as the balance sheet improves and management execution continues,” they said.
“The key risk is if European pricing weakens from here,” they added.
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