Volvo Cars (Hold, TP: SEK47.00) - Still-elevated costs
We are 8% above consensus on Q1e EBIT before JVs, but the base is low and there are many moving parts on the cost side, meaning that uncertainty is rather high, in our view. We expect costs to have remained elevated but see small margin improvement QOQ as more price increases come through (mainly from the backlog in Europe). We still see plenty of risks, but believe they are reflected in the valuation. We reiterate our HOLD but have lowered our target price to SEK47 (53), mainly relating to a lower market value for Polestar.
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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