Volvo Cars (Hold, TP: SEK35.00) - Distributing the elephant in the room
Volvo Cars’ strong Q4 gross margin and clarified “mid-decade” targets were overshadowed by the announcement that it is evaluating the distribution of Polestar to shareholders. This would address one of the negative aspects of the equity story and adds a binary aspect with the risk/reward skewed to the upside, in our view. Thus, we have upgraded to HOLD (SELL) and raised our 2024–2025e adj. EBIT (before JVs) by 12–15%, but remain below consensus. We have increased our target price to SEK35 (32).
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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