BUY RNO vs SELL UG

We are initiating a position today on the back of continuing diverging trends in the two names. This is the start of their product cycles diverging.

European September car registration numbers out this morning are just the start with PSA numbers -5.8% and Renault dominating with +18.7%.

We also expect the YEN to weaken as the US move towards a rate rise and technically on the chart we see this playing out.

Faurecia numbers where poor and they are a big supplier making up 25% of PSA’s market cap.

We also expect RNO Q3 earnings to beat UG on the top line and bottom line.

BUY RNO FP SELL UG FP.