Volkswagen are paying 1.9x sales, 20x 2015 consensus earnings and 17-18x peak earnings for Scania (they clearly see synergies the market may not).
Volvo is on 1.36x sales, 12.5x 2015 and is on 11.2x peak earnings.
Volvo looks cheap, and should management succeed in turning the business around like we now believe they can (having been bearish for the past few years) Volvo increasingly looks like a good investment opportunity. Note also Daimler are sticking to their call they expect truck sales to rise significantly this year, and we note another broker joins in the chorus today in Volvo, with Citi upgrading Volvo to buy. We expect more will follow.
Last week Volvo’s shares were at five year relative lows vs. the SXNP.
Stay long Volvo
