S&P has returned Renault's investment rating to stable outlook. Whether to buy shares

S&P Global Ratings has upgraded the credit rating of French automaker Renault to "investment grade" BBB- with a stable outlook. Renault last had a positive rather than "junk" rating in early 2020, Bloomberg noted.

S&P Global Ratings upgraded the rating to investment grade, citing Renault's revamped product lineup and its "multi-energy strategy" that combines sales of internal combustion engine cars, hybrids and electric vehicles, the agency said in a statement.

According to S&P Global, Renault's business model will support the creation of sustainable free cash flow from operations (FOCF) over the next few years. In addition, the agency expects the company to maintain a "prudent" financial policy that balances distributions to shareholders and protection of the net cash position.

"Renault has significantly revamped its product lineup and is expanding its international presence. Both factors should support revenue and volume growth in 2026-2027, despite a more competitive market environment," S&P Global said. The stable outlook assumes Renault "will be able to withstand weak market conditions in Europe" without a significant deterioration in its credit metrics or liquidity, the agency added.

"We welcome the upgrade by S&P Global Ratings, which recognizes Renault Group's significant progress in improving profitability, strengthening cash flow and reinforcing a robust liquidity profile," Renault Group CEO François Provost said, he was quoted as saying in a company press release.

Shares of Renault ended trading on December 18 on the Paris Stock Exchange with a fall of 1.95% - to €35.69. Over the current year, the securities have fallen by 24%.

At the same time, most analysts advise to buy the company's shares: they have a total of 13 such recommendations (Buy and Overweight ratings) out of 22 in total, The Wall Street Journal shows. Another eight analysts advise to hold (Hold) and only one - to sell (Sell).

The average target price is €44.58, suggesting a potential upside of 25% from the Dec. 18 closing level.

Since 2021, the automaker has significantly reduced production costs and increased capacity utilization to an average of 90%, Investing.com wrote This has helped improve the operating profit margin from its automotive business to 5.9% in 2024 from 3.3% in 2021.

In July 2025, Renault changed its CEO: Luca de Meo, who headed the company for five years, left to manage the French group Kering, which owns the brands Gucci, Yves Saint Laurent and Balenciaga. François Provost, who has worked at Renault since 2002 and was previously in charge of procurement, partnerships and public relations, became the new CEO of Renault, Bloomberg noted.

In December, analysts at Bank of America named Renault one of the best stocks in Europe's auto industry for 2026.

This article was AI-translated and verified by a human editor