Bank of America maintains its buy rating on truck and bus manufacturer Volvo, with a target price of 300 kronor, according to a recent analysis.
The company recently held a virtual meeting with Volvo's Head of Investor Relations, and Bofa highlights the following key takeaways in its analysis:
* The truck market remains weak in North America but stable in Europe.
* The short-term outlook for the construction equipment market is cautious. Margin pressure is expected to continue into the fourth quarter (in line with consensus).
* Bofa expects truck orders to gradually improve through 2026 and continues to favor Volvo for exposure to this recovery.
AB Volvo is the leading European truck maker and No. 3 worldwide. Net sales break down by activity as follows:
- sales of trucks (68.4%): 219,377 vehicles sold in 2024 (names Volvo, Renault, Eicher and Mack);
- sales of construction equipment (16.8%): excavators, loaders, backhoes, hydraulic shovels, graders, dump trucks, etc.;
- financial services (5.1%);
- bus and chassis sales (4.7%): world's No. 2 largest manufacturer;
- sales of parts, control systems, and marine and industrial motors (3.8%): for commerce and cruise ships and for industrial applications (irrigation units, lifting trucks, electrical generators, etc.);
- other (1.2%).
Net sales are distributed geographically as follows: Europe (41.1%), North America (30.8%), Asia (11.2%), South America (10.7%), Africa and Oceania (6.2%).
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