VOLCAR B Will Benefit From Rising Confidence In Electrification Execution

Analysts have lifted their price target for Volvo Car AB (publ.) from SEK 20.10 to SEK 37.00, citing a lower discount rate, slightly stronger expected revenue growth, improving profit margins, and a higher anticipated future P E multiple, in line with recent upward revisions in Street targets.

Analyst Commentary

Bullish analysts highlight that the latest target price increases reflect growing confidence in Volvo Car AB (publ.)'s ability to execute on its strategic roadmap, particularly around electrification, cost efficiency, and brand positioning in key markets. The move higher in targets is seen as a recalibration of valuation assumptions to better align with improving fundamentals and a more constructive industry outlook.

Bullish Takeaways

• Recent upward revisions in price targets, including moves from the mid-teens to the mid-twenties per share, signal that prior valuation discounts are being reassessed as execution risk is perceived to be moderating.
• Bullish analysts point to early traction in Volvo Car AB (publ.)'s electrified portfolio as a key driver of potential top line acceleration, which could support a rerating of the stock if volumes and mix continue to improve.
• Improving profitability expectations, helped by ongoing cost discipline and a shift toward higher margin models, are feeding into higher earnings forecasts and underpinning more constructive valuation multiples.
• The combination of a still modest absolute share price, rising Street targets, and a more supportive auto sector backdrop is seen as a positive setup for further share appreciation if the company delivers against near term milestones.

What's in the News

• Volvo Car AB (publ.) has called a Special and Extraordinary Shareholders Meeting for December 8, 2025 in Gothenburg to elect two new board members, set their remuneration, and address other governance matters (Key Developments).
• In China, Volvo successfully launched the XC70 next generation long range hybrid in August, with strong customer response indicating solid demand for the model (Key Developments).
• In the US, Volvo plans to add a new hybrid model to its South Carolina plant before the end of the decade, complementing planned local production of the best selling XC60 and lifting capacity utilisation for the American market (Key Developments).
• Volvo is expanding its fully electric lineup, with the ES90 already on the road, EX90 flagship SUV production ramping up after software updates, and increased EX30 output at the Ghent plant in Belgium (Key Developments).
• Final road testing is underway for the all new, fully electric EX60 SUV ahead of its planned January 2026 reveal and subsequent production start, a key model aimed at strengthening Volvo's position in the mid size electric SUV segment (Key Developments).

Valuation Changes

• The fair value estimate has risen significantly from SEK 20.10 to SEK 37.00, implying a materially higher assessed intrinsic value for the shares.
• The discount rate has fallen modestly from 9.97 percent to approximately 9.49 percent, reflecting a slightly lower assumed risk profile or cost of capital.
• Revenue growth has increased slightly from about 4.13 percent to roughly 4.26 percent, indicating a marginally more optimistic top-line outlook.
• The net profit margin has improved moderately from around 5.36 percent to about 5.81 percent, pointing to better expected profitability.
• The future P/E ratio has risen meaningfully from roughly 3.4x to about 5.8x, suggesting a higher anticipated valuation multiple on forward earnings.