Renault Shares Plunge 17% on Profit Warning, Interim CEO Appointment

Renault's shares plunged over 16% following the company's announcement of a lowered 2025 operating margin target of around 6.5%, down from the previous forecast of at least 7%, and a reduced free cash flow guidance between 1 billion to 1.5 billion euros, down from more than 2 billion euros. This downgrade was attributed to worsening automotive market conditions, increased competition, and weaker-than-expected first-half results, including a disappointing operating profit margin of 6% and free cash flow of just 47 million euros. The French automaker also named CFO Duncan Minto as interim CEO after the abrupt resignation of Luca de Meo, signaling leadership uncertainty amid challenging market dynamics. Analysts from Deutsche Bank, Berenberg, and Morningstar expressed concerns about Renault's profit outlook and competitive pressures, especially in the electric vehicle segment and European market slowdown. Despite recent new model launches and relatively better performance than some European peers, Renault faces ongoing market headwinds and delayed billings affecting cash flow. The company plans to intensify cost-cutting efforts as it navigates these operational and financial challenges.