On Friday, Citi revised its price target for Daimler Truck Holding AG (DTG:GR) (OTC: DTRUY) to €44.00, a decrease from the previous €45.00, while sustaining a Buy rating on the shares. The adjustment comes ahead of the company's third-quarter results, which are scheduled to be reported on November 7.
The firm's analyst pointed out that although their margin estimate for Mercedes-Benz (OTC:MBGAF) (MB) remains below consensus expectations, the recent unit sales figures have provided a clearer view of the upcoming third-quarter results and the full-year 2024 guidance. However, there is an anticipation of further margin challenges for MB in the fourth quarter due to prolonged shutdowns in December, although this is not expected to impact the overall group guidance.
Regarding orders for the third quarter, the analyst indicated a slight deviation from consensus estimates. They project a 10% increase in orders for the Truck North America (TN) segment, surpassing expectations. Conversely, a shortfall is likely in the Trucks Asia by 7% and Buses by 19% segments. Orders for MB in Europe and Brazil are expected to align with predictions.
The focus for investors is anticipated to shift towards the company’s outlook for 2025, with insights to be offered by competitors Volvo (OTC:VLVLY) and PACCAR (NASDAQ:PCAR) on October 18 and October 22, respectively. Daimler Truck is expected to provide its guidance in March.
Despite the projection that the Street's earnings before interest and taxes (EBIT) estimates for Daimler Truck in 2025 may be overly optimistic, the analyst believes the stock still presents an attractive risk-reward profile. This optimism is based on the potential for structural cost savings, an anticipated order trough in North America in the first half of 2025, and the current appealing valuation of the company's shares.
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