Renault shares tumble on profit warning as interim CEO named

  • 2025-07-16 07:31:39

Shares in Renault (RENA.PA), opens new tab plunged as much as 18% on Wednesday after the French automaker surprised investors with a profit warning just a month after CEO Luca de Meo announced his departure.

The company said late on Tuesday that June sales volumes were weaker than expected and it was now aiming for a full-year operating profit margin of 6.5%, below a previous target of at least 7%.

While the revised outlook was still better than most of its peers, Renault had been seen as insulated from many of the challenges facing rivals, including U.S. tariffs and weakness in China because of its limited exposure to those markets. It was one of the few automakers not to warn on profits last year.

Oddo BHF analyst Michael Foundoukidis said the timing of the profit warning was "unfortunate", just a month after news of de Meo's departure and only two weeks after the company had presented a more positive outlook in discussions with analysts.

The company said the process for naming a permanent CEO was "well underway", but gave no update on timing.

Shares in rivals Stellantis (STLAM.MI), opens new tab and Volkswagen were down 3.8% and 1.6% respectively, underlining how jittery investors are about further weakness in a market already under pressure from a global trade war.

Renault shares had outperformed rivals this year, with a flurry of new launches boosting sales and profits.

The revised 6.5% margin guidance for 2025 is "realistic", Berenberg analysts said, pointing to Renault's pipeline of new launches, and adding that it would still compare favourably to most European peers.

Renault said it would step up cost-cutting measures to improve margins in the second half of the year, but some analysts see market pressure continuing.

"We foresee longer-term market pressure playing out beyond June. Most of the European carmakers released a new lineup of affordable electric vehicles, increasing competition," Morningstar analysts said.

They added that Renault's margins and free cash flow likely peaked last year, and that high-single digit margins were not sustainable for a mass-market automaker, particularly of Renault's smaller scale.

Related