Volvo (Hold, TP: SEK152.00) - De-rating likely almost complete
We have upgraded our recommendation to HOLD (SELL), but keep our target price of SEK152. The recent weak share performance coupled with our higher earnings estimates on the back of favourable FX changes and still-strong demand for Trucks in North America for construction equipment in China has resulted in a significant de-rating. We find the valuation fair (c16% discount to its historical average), given that we are likely at the top of the cycle with increased threats from alternative fuels.
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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