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The Q3 23 figures exceeded the consensus from the top to the bottom line on robust price realization in the Truck segment. Truck order intake, the hottest topic, also slightly exceeded expectations. Volvo also issued 2024 market guidance implying a soft decrease in its key regions, suggesting a controlled cycle downturn. We will raise our FY23 EPS. In addition, this confirms the AV and investor FY24 scenarios. Trucks look to be a safer market than cars, although the valuation is tight.
Companies: Volvo (VOLV-B:STO)Volvo AB Class B (VOLV.B:OME)
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Volvo published consensus-beating Q2 23 figures on the back of greater visibility and higher volumes. The group also raised its truck market assumption in NA and EU. This had already been previewed by Daimler Truck’s strong preliminary results last week, suggesting that today’s very good print has already been factored into the share price. Although we will slightly upgrade our estimates, we continue to believe the current valuation is too demanding given that we are approaching a cycle peak.
Volvo preliminary Q1 23 results posted better-than-expected sales and profitability, likely stemming from a combination of strong pricing and volumes especially in the Trucks segment. While these numbers call for upgrades to the consensus, the positive sentiment may be short lived as we have yet to get any data on demand.
Volvo’s Q4 22 figures came in below estimates in terms of margins as cost inflation acted as a brake, the company provided financial support for suppliers and the sales teams took it easy on price hikes to favour long term relationships. Order intake remained a tweaked KPI as the group continued to apply restrictions on orders to manage delivery lead times. Volvo confirmed its 2023 market outlook. The FY22 SEK 7 dividend proposal was supplemented a higher-than-expected extra dividend.
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