Promising targets
The new financial targets presented by Volvo earlier today underscore the structural improvements the company is undergoing. It now targets an EBIT margin through a business cycle of above 10% and less earnings volatility. This makes us more optimistic that we could be about to see years of earnings growth and less downside risk in earnings, which should warrant a higher valuation. Hence, we have upgraded the stock to BUY (Hold) and raised our target price to SEK155 (145).
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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