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Volvo AB
(OTC:VLVLY)
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Rating:66Neutral
Price Target:
$42.00
â–²(14.91% Upside)
Action:Reiterated
Date:07/18/26
The score is anchored by solid but mixed fundamentals: good profitability and returns are offset by elevated leverage and notably weaker, volatile free cash flow. Technicals are constructive (price above key moving averages and positive MACD), supporting the outlook near term. Valuation is average for a cyclical name (P/E ~21 and modest ~1.6% yield). The latest earnings call adds support via strong orders and upbeat guidance, tempered by tariff, inflation, and ramp-up execution risks.
Positive Factors
Service business recurring revenue momentum
A growing service business (organic +7%, 12M service sales SEK 126bn) boosts higher-margin, recurring revenue that smooths cyclical up/downturns. Over 2–6 months this supports margin resilience, stable aftermarket cash flow, stronger customer retention and improved lifetime unit economics.
Negative Factors
Elevated leverage on the balance sheet
Debt-to-equity around 1.35 is persistently above 1.0, limiting financial flexibility. In a cyclical capital‑goods business this raises interest expense sensitivity and reduces room to invest, pursue M&A, or withstand prolonged demand downturns without corrective measures.
Read all positive and negative factors
Positive Factors
Negative Factors
Service business recurring revenue momentum
A growing service business (organic +7%, 12M service sales SEK 126bn) boosts higher-margin, recurring revenue that smooths cyclical up/downturns. Over 2–6 months this supports margin resilience, stable aftermarket cash flow, stronger customer retention and improved lifetime unit economics.
Read all positive factors
Volvo AB Key Performance Indicators (KPIs)
Volvo AB (VLVLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$72.58B
Dividend Yield1.62%
Average Volume (3M)42.66K
Price to Earnings (P/E)19.3
Beta (1Y)1.05
Revenue Growth4.58%
EPS Growth4.95%
CountryUS
Employees98,844
SectorIndustrials
Sector Strength72
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)17.63
Shares Outstanding1,592,708,700
10 Day Avg. Volume39,565
30 Day Avg. Volume42,659
Financial Highlights & Ratios
PEG Ratio-0.52
Price to Book (P/B)3.36
Price to Sales (P/S)1.25
P/FCF Ratio21.11
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.22
Revenue Forecast (FY)$51.61B
Volvo AB Business Overview & Revenue Model
Company Description
AB Volvo (publ), a multinational enterprise operating through its subsidiaries, is a leading producer and marketer of commercial vehicles, buses, heavy construction equipment, and specialized marine and industrial power solutions. Its extensive gl...
How the Company Makes Money
Volvo AB makes money primarily by selling commercial vehicles and equipment and by earning recurring revenue from services tied to its installed base. Key revenue streams include: (1) Sales of heavy-duty trucks and related chassis/cab configuratio...
Volvo AB Earnings Call Summary
Earnings Call Date:Jul 17, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 23, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive operational and financial performance: strong organic sales growth (+7%), robust adjusted operating income (SEK 14.8bn) and margin expansion (11.7%), solid cash generation, and very healthy order intake and book-to-bill metrics. Key strategic wins (product launches, services momentum, Penta exposure to data centers) support future growth. However, notable headwinds remain—freight and material inflation, tariff uncertainty (SEK ~1.2bn in Q2 plus run-rate), North American delivery/ramp-up execution risk, regional softness in parts of Asia and paused Middle East deliveries for Penta, and some timing-related R&D capitalization effects. Overall, positives materially outweigh the lowlights, though management highlighted areas of focus and uncertainty for H2 (tariffs, ramp-up, cost inflation).Positive Updates
Strong profitability and margin expansion
Adjusted operating income of SEK 14.8 billion in the quarter with an expanded adjusted operating margin of 11.7%, demonstrating earnings resilience despite external headwinds.
Negative Updates
Freight and material cost inflation
Higher freight and material costs impacted results in the quarter and are an ongoing headwind; company is pursuing price realization and commercial measures to mitigate inflationary pressures.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong profitability and margin expansion
Adjusted operating income of SEK 14.8 billion in the quarter with an expanded adjusted operating margin of 11.7%, demonstrating earnings resilience despite external headwinds.
Read all positive updates
Company Guidance
The call’s forward guidance focused on executing the strong order book and gave many concrete metrics: truck market forecasts were reiterated/lifted to 265,000 units retail in North America, Europe was increased by 5,000 to 315,000, China was lifted by 120,000 to 880,000, India kept at 400,000 and Brazil at 80,000; construction equipment guidance moved North America to +5% (from flat), Europe +5%, Asia -5% and China +10%. Financial and policy guidance for Q3 included a positive FX impact of ~SEK 500m YoY, an underlying tariff run‑rate of ~SEK 1.1bn expected to be fully offset by IEEPA refunds (net ~0), a full‑year R&D capitalization of SEK 3.5bn (YoY ~-SEK 500m) and a reiterated full‑year tax rate of 24%. Operational priorities were a North American production ramp (backed by truck book‑to‑bill of 170% in Q2 and 106% 12‑month rolling, North America 150%/133% 12M), continuing service momentum (organic service growth +7% and 12‑month rolling service sales SEK 126bn), and maintaining industrial liquidity (operating cash flow Q2 SEK 5.8bn; industrial net cash ~SEK 35bn).Volvo AB Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
63
Positive
Cash Flow
56
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 471.53B | 479.18B | 526.82B | 552.76B | 473.48B | 372.22B |
| Gross Profit | 119.49B | 116.87B | 144.05B | 149.32B | 111.74B | 89.75B |
| EBITDA | 74.26B | 72.70B | 91.35B | 89.64B | 67.01B | 63.08B |
| Net Income | 35.84B | 34.46B | 50.39B | 49.83B | 32.72B | 32.79B |
Balance Sheet | ||||||
| Total Assets | 678.69B | 648.59B | 714.56B | 674.07B | 629.06B | 515.86B |
| Cash, Cash Equivalents and Short-Term Investments | 47.07B | 73.50B | 73.49B | 73.61B | 67.18B | 50.79B |
| Total Debt | 260.36B | 248.06B | 258.85B | 233.52B | 205.05B | 151.45B |
| Total Liabilities | 502.00B | 470.11B | 517.20B | 493.33B | 462.83B | 371.74B |
| Stockholders Equity | 176.57B | 178.40B | 194.05B | 177.79B | 162.72B | 141.04B |
Cash Flow | ||||||
| Free Cash Flow | 23.29B | 28.35B | 28.06B | 3.00B | 7.40B | 11.81B |
| Operating Cash Flow | 49.84B | 45.59B | 46.44B | 21.40B | 33.24B | 33.65B |
| Investing Cash Flow | -34.66B | -27.48B | -24.14B | -21.57B | -21.49B | -1.49B |
| Financing Cash Flow | -38.96B | -25.39B | -21.87B | 1.82B | 7.48B | -57.55B |
Volvo AB Technical Analysis
Neutral
36.55
Price Trends
35.23
Positive
34.54
Positive
33.34
Positive
Market Momentum
0.45
Positive
42.29
Neutral
0.16
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLVLY, the sentiment is Neutral. The current price of 36.55 is below the 20-day moving average (MA) of 36.96, above the 50-day MA of 35.23, and above the 200-day MA of 33.34, indicating a neutral trend. The MACD of 0.45 indicates Positive momentum. The RSI at 42.29 is Neutral, neither overbought nor oversold. The STOCH value of 0.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VLVLY.
Volvo AB Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $68.81B | 27.48 | 12.73% | 2.05% | -10.49% | -18.64% | |
72 Outperform | $392.84B | 36.70 | 54.14% | 0.69% | 18.36% | 18.23% | |
72 Outperform | $9.41B | 17.39 | 12.32% | 1.39% | 1.93% | -12.16% | |
66 Neutral | $72.58B | 19.30 | 19.98% | 1.58% | 4.58% | 4.95% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $165.30B | 34.42 | 18.25% | 1.03% | 3.98% | -14.68% | |
50 Neutral | $12.86B | 41.98 | 4.01% | 0.90% | 0.60% | -62.01% |
* Industrials Sector Average
VLVLY
Volvo AB
35.79
5.89
19.71%
CAT
Caterpillar
856.57
452.42
111.94%
CNH
CNH Industrial
10.44
-1.63
-13.53%
DE
Deere
608.85
126.10
26.12%
OSK
Oshkosh
152.89
16.93
12.45%
PCAR
Paccar
130.79
34.93
36.44%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.