Volvo Group: Postcard from Eskilstuna

Research evidence excerpt

Volvo Group: Postcard from Eskilstuna

We see upside to cons margin forecasts

Exhibit 1: We see 3/7% upside to 2026/27 adj EBIT consensus forecasts (on our unchanged estimates)

BofA key Volvo financial forecasts vs Visible Alpha consensus (SEKmn unless otherwise stated)

New Consensus BofA vs consensus

2026 2027 2028 2026 2027 2028 2026 2027 2028

Group revenue 501,229 540,837 561,422 491,899 528,044 556,717 1.9% 2.4% 0.8%

Industrial revenue 481,286 520,886 539,939 471,366 508,507 537,615 2.1% 2.4% 0.4%

Group adj EBIT 59,884 72,694 76,496 57,665 66,857 72,333 3.8% 8.7% 5.8%

Industrial adj EBIT 55,968 68,453 71,625 54,079 64,089 70,180 3.5% 6.8% 2.1%

Reported diluted EPS 21.78 27.40 28.88 21.08 24.86 26.95 3.3% 10.2% 7.1%

Declared DPS 15.00 20.50 21.50 15.90 18.51 19.91 (5.7%) 10.8% 8.0%

Source: BofA Global Research estimates, Visible Alpha

BofA GLOBAL RESEARCH

Exhibit 2: We see raw material prices largely flat y/y in 2026, but step up into 2027 based on spot

Estimated raw material cost breakdown of heavy-duty truck (€/unit) (excluding freight costs)

12,000

Steel Iron Aluminium Copper Rubber Plastic Glass Lubricant Energy

10,000

8,000

6,000

4,000

2,000

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Spot

Source: BofA Global Research estimates, Bloomberg. Note: assumes 55% EU costs, 45% N American costs; assumes no energy hedging

Price objective basis & risk

Volvo Group (VOLVF / VLVLY)

Our SEK380 price objective ($41.0/ADR) is calculated based on a rounded average of

three approaches:

(1) 10.5x 2027E industrial EV/EBIT, above Volvo's historical 6-9x range as we expect

order momentum to improve and see a strong growth outlook.

(2) 14.0x 2027E group P/E, above Volvo's historical 8-12x range as we expect order

momentum to improve and see a strong growth outlook.