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On Tuesday, Barclays (LON:BARC) analyst Kai Alexander Mueller downgraded Traton SE (ETR:8TRA) shares from Overweight to Equalweight, setting a price target of EUR 38.00. The adjustment reflects concerns over the heavy-duty commercial vehicle manufacturer’s exposure to increasing uncertainties in North America and expected volume normalization in Brazil.
Mueller acknowledged Traton’s recent outperformance compared to its direct peers and the broader market, citing the company’s impressive earnings and cash resilience recovery, particularly at Scania V&S. Traton’s success in turning around its MAN T&B segment and its relatively undemanding valuation were also highlighted as factors in the stock’s favorable performance in recent months.
Despite these positive developments, the analyst pointed out several factors that could pose risks to Traton’s stock value. The company’s significant investment in China, at a time when European peers are more cautious, and the unquantified costs associated with multi-year plant ramp-up efforts, particularly affecting Scania V&S’s adjusted margin profile, were cited as potential downside factors.
Additionally, Mueller expressed concern over the limited short-term appetite of Traton’s main shareholder, Volkswagen (ETR:VOWG_p) Group, to monetize its investment through a larger strategic move. On March 18, 2025, Volkswagen Group sold a 2.2% stake in Traton, reducing its holding to 87.5%. The analyst suggests that a more significant strategic initiative could be necessary for Traton to fully unlock its potential over time and narrow its valuation gap with European and US peers.
The downgrade by Barclays comes as Traton navigates a complex global market environment, with varying regional challenges and strategic investment decisions impacting the company’s outlook.
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