Renault shares fall after Moody's cuts company to 'junk' status

This post was originally published on this site

PARIS (Reuters) – Renault’s (PA:) shares fell on Wednesday after credit rating agency Moody’s cut its rating on the French carmaker’s debts to “junk” status.

Renault shares were down 2.3% to 30.2 euros ($32.71) in early trading, its lowest level since mid-2012, making it among the worst performing stocks on Paris’ benchmark CAC-40 () index.

Moody’s late on Tuesday cut its credit rating on Renault to Ba1 status after the company posted weak annual results.

On Feb 14, Renault reported its first loss in a decade and the company also cut its dividend.

“The downgrade to ‘Ba1’ was triggered by Renault’s substantially weakened operating performance reported for the year 2019 to a level no longer commensurate with the Baa3 rating category,” wrote Moody’s.

“Based on the company’s 2020 guidance anticipating a further decline in the group’s operating margin and the continuing weakness of the market environment, we do not expect that Renault will be able to restore healthy operating margin levels in the medium term,” the rating agency added.

Brokerage Jefferies also cut its share price target for Renault to 28 euros from 38 euros.

“Renault is set to remain income poor for a while,” wrote Jefferies, which kept an ‘underperform’ rating on the stock.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment