On Wednesday, Jefferies updated its outlook on Daimler Truck Holding AG (DTG:GR) (OTC: DTRUY) shares, lowering its price target to €52.00 from the previous €56.00, while maintaining a Buy rating on the stock. The adjustment follows the company's recent financial disclosures.
The firm pointed out that excluding the impairment in China, Daimler Truck's adjusted Industrial EBIT outperformed consensus by 6%, with the overall group exceeding expectations by 2%. The analysis highlighted that despite a solid pricing environment, there was a contrast between the performance of Mercedes-Benz (OTC:MBGAF) (MB) and the North American market, which raised questions about the underlying factors.
Jefferies also noted a reduction in the forecast for the fiscal year 2024 EBIT, now expecting a 2% decrease compared to a consensus before the impairment disclosure, which indicated a 4% decline, including the impairment in China. The firm anticipates that as signs of improving end markets become more evident, there will be potential for the stock's valuation to improve from its current level, which is less than 8 times price-to-earnings (PE) ratio, or under 7 times when adjusted for capital.
The firm's commentary concluded with an outlook that, as the clarity on market improvement emerges, Daimler Truck's stock is expected to experience a re-rating, suggesting a potential increase in its market valuation in the future.
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