Renault SA Just Missed EPS By 54%: Here's What Analysts Think Will Happen Next

Renault SA (EPA:RNO) shareholders are probably feeling a little disappointed, since its shares fell 7.1% to €48.76 in the week after its latest yearly results. Results overall were not great, with earnings of €2.72 per share falling drastically short of analyst expectations. Meanwhile revenues hit €56b and were slightly better than forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Renault

Taking into account the latest results, Renault's 16 analysts currently expect revenues in 2025 to be €57.2b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 271% to €10.39. Before this earnings report, the analysts had been forecasting revenues of €56.3b and earnings per share (EPS) of €10.85 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at €58.87, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Renault at €85.00 per share, while the most bearish prices it at €44.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Renault's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.7% growth on an annualised basis. This is compared to a historical growth rate of 3.1% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Renault is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Renault. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Renault's revenue is expected to perform worse than the wider industry. The consensus price target held steady at €58.87, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Renault. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Renault analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for Renault (of which 1 is a bit unpleasant!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.