Volvo (Buy, TP: SEK295.00) - 2024e upside potential remains
Despite truck orders in North America and Europe missing our expectations and the company lowering its Trucks and Construction Equipment market outlook for Europe, our 2024e adj. EBIT is unchanged, as we were already below the guidance. We believe there is upside potential to our estimates and consensus for 2024 despite a softening cycle, and that the low valuation adds to an already appealing story. We reiterate our BUY and have raised our target price to SEK295 (285).Volvo is a manufacturer of trucks, buses, construction equipment and marine and industrial engines. Co.'s activities are organized into six areas: Group Trucks, which sells and markets trucks under Eicher, Mack, Renault Trucks, UD Trucks and Volvo brands; Construction Equipment, which includes equipment for construction and related industries; Buses, which includes buses and bus chassis for city, intercity and coach traffic; Volvo Penta, which manufactures engines and drive systems for boats and commercial craft; Governmental Sales, which manufactures special-purpose vehicles; and Volvo Financial Services, providing customer financing and leasing, dealer financing and fee based products.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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