Stock Analysis & Valuation Renault S.A. (RNO.SW)

• Previous Close: CHF60.28
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	86.00	43
Graham Formula	38.50	-36

Strategic Investment Analysis

Company Overview

Renault SA (RNO.SW) is a leading French multinational automobile manufacturer headquartered in Boulogne-Billancourt, France. Founded in 1898, Renault operates across multiple segments, including Automotive, AVTOVAZ, Sales Financing, and Mobility Services. The company produces a diverse range of vehicles under well-known brands such as Renault, Dacia, Alpine, LADA, and through partnerships with Nissan, Datsun, and Infiniti. Renault is a pioneer in electric vehicles (EVs) and offers a comprehensive portfolio of passenger cars, light commercial vehicles, and innovative mobility solutions. The company also provides financing, rental, and maintenance services, enhancing its revenue streams beyond traditional vehicle sales. Renault's strategic focus on electrification, cost efficiency, and global partnerships positions it as a key player in the rapidly evolving automotive industry. With a strong presence in Europe and emerging markets, Renault continues to drive innovation in sustainable mobility while maintaining a competitive edge in the consumer cyclical sector.

Investment Summary

Renault SA presents a mixed investment profile. On the positive side, the company has a strong brand portfolio, a growing presence in the EV market, and a diversified revenue base that includes financing and mobility services. Its strategic alliances with Nissan and Mitsubishi provide economies of scale and technological synergies. However, Renault faces significant risks, including high exposure to the cyclical automotive industry, intense competition, and the capital-intensive nature of EV development. The company's beta of 1.706 indicates higher volatility compared to the broader market. While Renault's net income of €752 million and operating cash flow of €7.16 billion in the latest fiscal year demonstrate financial resilience, investors should weigh these strengths against macroeconomic uncertainties, supply chain disruptions, and regulatory pressures in the auto sector.

Competitive Analysis

Renault operates in the highly competitive global automotive industry, where it competes with both traditional automakers and new EV entrants. The company's competitive advantage lies in its strong brand equity, particularly in Europe, and its early mover status in the EV market with models like the Renault Zoe. Renault's partnership with Nissan and Mitsubishi provides access to shared technology platforms, cost efficiencies, and a broader global distribution network. However, the company faces intense competition from larger rivals like Volkswagen and Toyota, which have greater scale and resources to invest in autonomous driving and electrification. Renault's focus on affordable EVs through its Dacia brand gives it an edge in price-sensitive markets, but it lags behind premium EV makers like Tesla in terms of technology and brand prestige. The company's financial services segment adds stability, but its reliance on the European market (where competition is fierce) and challenges in scaling up EV production remain key vulnerabilities. Renault's ability to execute its 'Renaulution' strategic plan—focusing on profitability over volume—will be critical in maintaining its competitive positioning.

Major Competitors

• Volkswagen AG (VOW3.DE): Volkswagen is a global automotive giant with a strong presence in all major markets. Its scale, diversified brand portfolio (including Audi, Porsche, and Skoda), and aggressive EV strategy under the ID series make it a formidable competitor. However, Volkswagen's complexity and recent software challenges in its EV lineup present vulnerabilities. Compared to Renault, VW has deeper pockets but less agility in adapting to market shifts.
• Peugeot SA (Stellantis NV) (PEUP.PA): Peugeot, now part of Stellantis, competes directly with Renault in Europe. Stellantis benefits from a multi-brand strategy (Peugeot, Citroën, Opel) and strong margins in North America. However, Renault's stronger foothold in emerging markets and its EV focus give it an edge in certain segments. Stellantis' larger scale post-merger poses a long-term threat to Renault's market share.
• Toyota Motor Corp (TM): Toyota is the world's largest automaker by revenue, with unparalleled manufacturing efficiency and a strong hybrid vehicle lineup. Its conservative approach to full electrification contrasts with Renault's more aggressive EV strategy. Toyota's global dominance in emerging markets and luxury segment (Lexus) makes it a tough competitor, though Renault's European stronghold and affordability focus provide differentiation.
• Tesla Inc (TSLA): Tesla leads in EV technology, brand cachet, and software-defined vehicles. Its direct sales model and Supercharger network are key advantages. While Renault competes in more affordable EV segments, it lacks Tesla's technological edge and vertical integration. Tesla's growing European presence threatens Renault's home market dominance in EVs.
• Hyundai Motor Co (HYMTF): Hyundai has emerged as a strong competitor with its competitive EV lineup (Ioniq series) and quality improvements. Its global footprint rivals Renault's, with particular strength in Asia and North America. Hyundai's faster design cycles and warranty offerings pressure Renault, though Renault's European brand loyalty and financing arm provide counterbalancing strengths.