Risk Reward Update

Research evidence excerpt

Risk Reward Update

'25 DEC '25 JUN '26 JUN '27

Key: Historical Stock Performance Current Stock Price Price Target

Source: Refinitiv, Morgan Stanley Research, Morgan Stanley Institutional Equities Division. The probabilities of our Bull,

Base, and Bear case scenarios playing out were estimated with implied volatility data from the options market as of 25

Jun 2026. All figures are approximate risk-neutral probabilities of the stock reaching beyond the scenario price in either

three-months’ or one-years’ time. View explanation of Options Probabilities methodology here

BULL CASE SKr 420.00 BASE CASE SKr 342.00 BEAR CASE SKr 220.00

14x bull case 2027E EPS of ~SEK30 ~13.5x Base Case 2027E EPS 10x Bear Case 2027E EPS of SEK22

Assumes sustained record earnings in Global truck demand stays at strong levels Another global slowdown in FY27E would

FY27E, sustained high global truck sales and in FY26/27, and Volvo's flexibility supports mean Truck and VCE EBIT margins fall back

VCE returning to strength. Group truck EBIT margins at ~11-12%, maintaining to just above 11%, but not to previous lows -

margins go to 13-14% in FY27E, driven by EPS at ~SEK25 in FY27E. On ~13.5x, this resulting in lower EPS near SEK22. On a

continued strength in trucks and CE. A equates to SEK342 per share. Multiples midpoint 10x, this equates to a Volvo share

higher P/E multiple of 14x would take the return to early-cycle levels as investor focus price of ~SEK220 under weaker economic

shares to SEK420 on the assumption of a shifts to structural industry tailwinds. Volvo sentiment conditions.

longer and sustained upcycle, and structural remains the best operator in our coverage,

growth in freight and logistics driving truck and is well positioned to manage the current

demand longer term.