Renault, the French automobile giant, witnessed a dramatic 17% drop in its share price on Wednesday after announcing a reduction in its 2025 financial guidance. This sharp decline marks its worst trading day since March 2020, with shares hitting a new 52-week low.
In a trading update released late Tuesday, Renault revised its operating margin forecast for 2025 to around 6.5%, down from a previous target of 7% or higher. Similarly, the company cut its free cash-flow projection to a range of €1 billion to €1.5 billion, significantly lower than the earlier estimate of €2 billion or more.
Leadership Changes Amid Challenges
Adding to the turbulence, Renault announced the appointment of Duncan Minto as interim CEO following the abrupt resignation of Luca de Meo last month. Minto, previously the company’s CFO, will oversee daily operations alongside Jean-Dominique Senard, who has been named Chairman of Renault s.a.s., the company’s operating group.
This leadership shakeup comes at a critical time for Renault, as it faces mounting challenges, including subdued demand in Europe and increasing competition from Chinese automakers.
Market Reaction and Analyst Concerns
The Paris-listed stock’s sharp decline also cast a shadow on other major European automakers. Shares of Stellantis, the maker of Jeep, and Volkswagen dropped by 4% and 2%, respectively.
Analysts from Deutsche Bank, in response to Renault’s profit warning, lowered their target price for the company’s stock from €55 to €47. While acknowledging the revised margin guidance is still competitive compared to peers, they noted the downgrade as an additional blow to investor sentiment.
Recent Performance and Outlook
Despite recent setbacks, Renault has outperformed many of its European counterparts in sales, thanks to an array of new vehicle launches. Notably, the company remains relatively insulated from U.S. trade disruptions caused by tariffs under former President Donald Trump, as it does not operate in the U.S. market.
However, the combination of weaker European demand and intensified competition from Chinese manufacturers has placed considerable pressure on Renault’s financial outlook.
The company is set to report its half-year results on July 31, which will likely offer further insights into its performance and strategy moving forward.
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