Citi maintains Buy on Daimler Truck, EUR48.00 target

Published 24/03/2025, 11:20
Citi maintains Buy on Daimler Truck, EUR48.00 target

On Monday, Citi reaffirmed its Buy rating and a price target of EUR48.00 on Daimler Truck Holding (ETR:DTGGe) AG (DTG:GR) (OTC: DTRUY), following a series of investor meetings with the company’s top executives. The meetings, which took place across Frankfurt, Stockholm, and London, featured discussions with Daimler (OTC:MBGAF) Truck’s CEO Karin Radstrom, CFO Eva Scherer, and Head of Investor Relations Christian Herrmann.

During these sessions, the management team conveyed a strong message about the company’s internal cost reduction efforts, which have been a focal point among investors. Citi analysts highlighted that while the potential for service revenue growth may be underappreciated, they acknowledge the near-term risks to the company’s guidance. Despite this, Citi maintains its forecast for the fiscal year 2025 EBIT at EUR 4.7 billion, slightly below Daimler Truck’s own EUR 5.1 billion target.

The analysis suggests that Daimler Truck’s earnings potential for 2026 and 2027 is robust. Citi also noted that the stock has not re-rated in line with its peer Volvo (OTC:VLVLY) and argued that based on the average ex-cash P/E ratio of 7x since the spin-off, plus EUR 13 per share in net cash, there could be a 40% upside potential for the stock.

The report indicated that more clarity on the extent of tariffs is needed to confirm whether the current guidance is achievable. The months of April and May were cited as critical for assessing the company’s business plans. The feedback from the investor meetings covered five main areas: the impact of tariffs, the outlook for North America, the pre-buy activity ahead of EPA27 regulations, the European market outlook, and the potential for self-help measures within the company.

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