On Wednesday, European stocks rose as hopes for economic recovery increased due to the progress in the Chinese services sector. This made investors believe that the tension between China and the US may not be as damaging as everyone feared.
Renault is also among the top European stocks soaring on Wednesday. The carmaker’s shares surged 7.6% in early Wednesday trading after the company finalized the deal for a €5 billion ($5.60 billion) loan.
The loan from the French government will be given to the carmaker as a tool that will help the company overcome the losses induced by the devastating coronavirus crisis. The entire auto sector took a big blow due to the complete shutdown during the pandemic and Renault is no exception to that.
The carmaker stated that the lender carried an insurance of up to 90% of the total loan from the French state, which owns a 15% stake in Renault. The banking pool for the loan is comprised of five banks, which include BNP Paribas, Credit Agricole, HSBC France, Natixis and Societe Generale.
Groupe Renault agreed to the terms of the government loan, which is estimated at a maximum of €5 billion. The entire sum of the loan or a part of it can be withdrawn at once or in several increments by December 31, 2020. The loan has an initial maturity of 12 months but Renault has the option to extend the maturity period with up to 3 years.
Last week, Renault announced its plans to shed about 15,000 workers worldwide, with 4,600 of them based in France. Although the company said it will seek voluntary layoffs and retirements, the news sparked several protests over the weekend.
Analyst stock price forecast and recommendation
According to CNN Money, 17 analysts who offer 12-month price forecasts for the Renault SA stock have an average price target of $23.83, with a high estimate of $48.89 and a low estimate of $14.37. The median estimate represents a +0.25% increase from the last price of $23.77.
The same media also provides recommendations for the Renault SA stock. These are based on the votes of 19 investment analysts who gave Renault SA a consensus rating of “Hold”. Among the polled analysts, 10 ranked the company’s stock as “Hold”, 6 as “Buy”, 2 as “Sell” and 1 – as “Underperform”.