HSBC announced on Wednesday that it had raised its target price for Renault from 57 to 63 euros, ahead of an event organized around the Dacia brand to be held in Romania on June 17 and 18.

The research firm - which is maintaining its buy recommendation on the stock - expects the meeting to be largely devoted to future product launches and its 'unique' cost structure.

While ruling out the communication of medium-term financial targets, HSBC says it anticipates positive announcements concerning prices and upcoming electric vehicles.

In its view, Dacia's trajectory is essential in Renault's drive to achieve an operating margin of 8% to 10%, given that the brand generates almost 20% of the Group's sales and 35% of its operating income.

Although the share price has gained 40% since the start of the year, outperforming the sector by 34 percentage points, the analyst says he still sees potential in the stock.

Given its lack of exposure to China and reassuring price trends, HSBC believes that the stock deserves to trade on higher valuation multiples than those on which it is currently trading.

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