Volvo Cars (Hold, TP: SEK18.00) - Downside risk to consensus
We are 26% below post-Q4 consensus on EBIT before JVs for Q1, as we estimate revenues to decline by 11% organically YOY to SEK87.1bn (4% below consensus) and a gross margin of 18.1% (consensus 18.3%). Retail sales declined 6% YOY in Q1, and wholesale sales are expected to be even lower. We have reduced our 2025–2027e EBIT before JVs by c26–14% due to FX and lower gross margin assumptions and are now 34–63% below consensus. We believe consensus is underestimating the price/mix headwinds and see Volvo Cars as particularly challenged by US tariffs. We reiterate our HOLD, but have cut our target price to SEK18 (23).
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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