Citi‘s Most Read – Industrial Tech & Mobility

Research evidence excerpt

Citi‘s Most Read – Industrial Tech & Mobility

although we have brought down our 2031-2040 estimates as the industry

supply/demand looks more challenged than we initially thought in those years.

Kyle Menges

Volkswagen (VOWG_p.DE) - VW can't save Europe all by itself

VW Management has been working very hard to cut costs, cut (German) capacity,

improve investment efficiency through partnerships, and re-work and localise its

China business. What VW has done since 2023 is almost unprecedented, in our

view. However, structural headwinds have accelerated. VW China ICE sales are

falling even faster, prior to any new BEV launches. VW European market share,

robust through FY25, is now under pressure. European pricing pressure is intense.

Raw materials and energy costs are high and rising. (BEV) regulatory costs are also

high and rising. VW cannot do it alone. We believe the EU cannot continue to

heavily regulate the EU auto industry, burdening it with the highest costs in the

world, whilst at the same time welcoming competitors that work to completely

different standards. That could be a recipe for the demise of European auto

manufacturing. We cut our VW estimates and TP to €94.

Buy | Target price €94.00

Harald C Hendrikse | Ross MacDonald | Soumava Banerjee

Sunbelt Rentals (SUNB.N) - FY4Q Beat; FY27 Guide a Bit Light After Adjusting

for the Reliant Deal

SUNB reported fiscal 4Q26 adj. EBITDA of $1,067mn, above Citi/FactSet

Consensus of $1,044mn/$1,050mn. Equipment rental revenue was ~3% above

our model and Adj. EBITDA margin of 38.7% was ~90-bps below our model. SUNB

guided to FY27 rental revenue growth of 5-8%, which we think equates to roughly

3-6% growth excluding added revenue from the Reliant acquisition, which we

think might be ~$200mn in FY27. SUNB's FY27 adj.