Morgan Stanley analyst Shaqeal Kirunda maintained a Sell rating on TRATON SE today and set a price target of €34.00.
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Shaqeal Kirunda has given his Sell rating due to a combination of factors tied to Traton’s weaker quality of earnings and cash generation. While first-quarter EBIT surpassed expectations on the back of solid performance at MAN and in International, overall profitability declined year over year as lower volumes, adverse currency effects, China-related costs, and tariffs weighed on margins.
At the same time, free cash flow was negative and materially below consensus, reflecting softer operating performance and seasonal working capital needs, which raises questions about cash conversion against guidance. Management kept its full-year outlook unchanged, but the balance of risks around truck demand, especially in North America amid soft freight trends and macro/geopolitical uncertainty, limits upside to the shares even with the price target maintained at $34, supporting a continued Sell stance.
In another report released on April 16, Kepler Capital also maintained a Sell rating on the stock with a €25.00 price target.