Shares in Renault plunged over 16% on Wednesday after the French carmaker slashed its 2025 financial guidance and named finance chief Duncan Minto as interim chief executive.
The sharp decline in investor confidence came as the company blamed a worsening auto market, rising competition, and weaker-than-expected first-half results for the revised outlook.
Renault share price was trading at 34.31 euros on Wednesday open.
Operating margin and cash flow forecasts lowered
Renault now expects to achieve a full-year operating margin of around 6.5%, down from a previous target of at least 7%.
The company also reduced its free cash flow forecast for 2025 to a range of 1 billion to 1.5 billion euros ($1.17 billion to $1.75 billion), down from earlier guidance of more than 2 billion euros.
Preliminary first-half figures revealed that Renault’s operating profit margin stood at 6%, while free cash flow came in at just 47 million euros—far below the consensus estimate of 645 million euros.
Group revenue grew 2.5% year-over-year to 27.6 billion euros, broadly in line with expectations.
Analysts slash estimates amid profit miss
Analysts reacted swiftly to Renault’s revised guidance.
Deutsche Bank’s Christoph Laskawi and Nicolai Kempf noted that while the new margin outlook remains competitive relative to peers, the warning represents “an obvious additional hit on sentiment for shares.”
The bank lowered its 2025 forecasts and cut its target price to 47 euros from 55 euros.
Berenberg analyst Romain Gourvil said the downgraded guidance implied an 8% to 10% cut to Renault’s 2025 operating profit, adding that the timing of the profit warning—just weeks after CEO Luca de Meo announced his resignation—was “clearly unhelpful.”
Berenberg also reduced its price target to 48 euros.
Citi analysts said the profit downgrade followed signs of weakness in retail activity in June and ongoing softness in light commercial vehicle volumes.
While first-half revenue was on target, the 6% operating margin was the key disappointment.
The firm noted that Renault doesn’t expect commercial conditions to improve significantly in the second half but is counting on new product launches, better vehicle availability, and tighter cost controls to lift performance.
Leadership transition amid market headwinds
The board has elevated Duncan Minto to the role of interim CEO, effective immediately.
Minto will oversee day-to-day operations alongside Jean-Dominique Senard, who will chair Renault’s operating board while a search for a permanent chief executive continues.
Minto, who joined Renault in 1997, has held several key financial roles across the group in France, Portugal, and with the Alpine brand.
He became Renault Group’s CFO in March 2025 and is seen as a steady hand during a period of mounting pressure on the company’s fundamentals.
The appointment follows former CEO Luca de Meo’s decision to leave Renault in September to take over as CEO of luxury conglomerate Kering, which owns brands such as Gucci and Balenciaga.
Reasons behind downgrade
Renault cited multiple headwinds driving the downgrade, including an increasingly competitive European market and ongoing trade tensions.
European automakers are under growing pressure from Chinese rivals, whose aggressive expansion and lower-priced electric vehicle offerings are squeezing margins across the continent.
In addition, the global auto industry is adjusting to the impact of President Donald Trump’s 25% tariffs on finished foreign-made vehicles, which took effect in early April.
While the administration has taken steps to prevent tariff stacking, uncertainty around the evolving trade environment remains a drag on sentiment and pricing power.
Renault said it is accelerating cost-cutting measures to support its balance sheet, with a renewed focus on manufacturing and R&D efficiencies. More details are expected when the company releases its full first-half earnings on July 31.
Weakened market but potential for recovery
Despite the weak near-term outlook, Renault said it is banking on an improved second half, with new model launches, increased availability of light commercial vehicles, and tight inventory control expected to support performance.
Executives remain hopeful that cost optimizations and volume gains can offset pricing pressures and macroeconomic uncertainty.
Still, the dual blow of a profit warning and leadership change has rattled investors already wary of the automaker’s ability to maintain momentum amid shifting global dynamics.
The next few quarters will be critical as Renault works to rebuild confidence and navigate one of the most challenging operating environments in the European auto industry in recent years.
The post Renault shares tumble after profit warning, leadership shake-up; analysts slash PTs appeared first on Invezz
