Volvo Cars (Hold, TP: SEK48.00) - Looking for visibility on margins
Although management said demand was still robust for its cars and that it expected lower raw materials costs in H2, comments about normalising prices in the industry and a BEV gross margin of a mere 2.6% in the quarter add some concerns. We have lowered our adj. EBIT before JVs by 4–9% across 2023–2025e but have raised our target price to SEK48 (47) owing to a slightly higher market value of Polestar and higher peer multiples. We reiterate our HOLD.
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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