Renault: Low valuation, but H1 pressure makes FY26 guidance a stretch

研报英文原文证据摘录

Renault: Low valuation, but H1 pressure makes FY26 guidance a stretch

Valuation & Rating

We continue to value Renault using a sum-of-the-parts (SOTP) approach but now base

our valuation on the average of our FY26-28 estimates, versus FY26-27 previously. We

have also added automotive FCF yield and removed EV/sales from our methodology.

EV/sales consistently inflated the valuation, while we believe investors attach limited

relevance to this metric. By valuing Renault solely on EV/EBIT, P/E and automotive FCF

yield, we place less emphasis on automotive net cash. EV/EBIT, which still captures net

cash, supports a more positive view and suggests the shares are inexpensive. However,

P/E and automotive FCF yield, which are equity rather than enterprise-value metrics,

point to a valuation more consistent with a Neutral rating. Our EV/EBIT and P/E multiple

assumptions remain unchanged. Our 12.5% automotive FCF yield assumption is broadly

in line with Renault’s current consensus valuation and the FY26-28 average for European

legacy OEMs. On this basis, we reiterate our Neutral rating but lower our PO from €33

to €30.

Exhibit 6: We lower our PO from €33 to €30, reflecting three changes to our valuation: 1) we roll our SOTP forward from FY26-27 to FY26-28; 2) we

incorporate our revised estimates (see Exhibit 3); and 3) we replace EV/sales with automotive FCF yield as a valuation metric.

Our SOTP valuation based on our estimates for FY26-27

Total

EV/EBIT Net P/E Auto FCF Auto FCF average

Adj. EBIT EV/EBIT valuation income PE valuation Auto FCF Yield valuation fair value

Average Average Average Average Average Average Average Average Average Average

EURm 26-28e Multiple 26-28e 26-28e 26-28e 26-28e 26-28e 26-28e 26-28e 26-28e

Renault Automotive 1,220 1.0 1,220