Morningstar launches coverage of Volvo Group, highlighting its strong margins and return on invested capital compared to competitors like Daimler and Traton. Volvo’s proactive management has led to single-digit operating expense/sales ratio and higher revenue from services, resulting in less margin volatility. Fair value estimate is SEK 262, with shares considered fairly valued.

The truck market is in a cyclical trough post-pandemic, with continued demand weakness expected through 2025 and 2026. Volvo aims to grow market share in North America, but analysts only include a 4% gain versus the company’s 10% target. Return to average margins of 10% anticipated from 2027 onwards.

Read more at Morningstar: Volvo: Long Track Record of Execution Excellence Sets Volvo Apart From Peers