On Friday, HSBC (LON:HSBA) upgraded Daimler (OTC:MBGAF) Truck Holding AG (DTG:GR) (OTC: DTRUY) stock, changing the rating from Hold to Buy, while slightly reducing the price target to €42.00 from the previous €43.00. The firm noted that Daimler Truck's stock has experienced a significant decline of approximately 30% since its peak in March 2024.
The analyst from HSBC pointed out that despite strong results in the North America and Buses divisions, Daimler Truck has faced headwinds due to a weaker performance in China and challenging market conditions in Europe, particularly in Germany. The company is in the process of adapting to these market dynamics.
According to the analyst's expectations, Daimler Truck will likely see margin improvements in Europe for 2025 and 2026 due to further fixed cost reductions. HSBC's new price target is based on a 50/50 DCF-ROIC/average PE valuation method and suggests a potential upside of around 23%.
The revised price target reflects the analyst's confidence in Daimler Truck's ability to recover and improve its financial standing in the coming years despite its recent share price downturn and the challenges it faces in various markets.
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