European Machinery: Debate of the Day - Daimler Truck‘s Guide Upgrade, TNA-MB Tug of War

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European Machinery: Debate of the Day - Daimler Truck‘s Guide Upgrade, TNA-MB Tug of War

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23 Jul 2026 12:47:28 ET │ 9 pages

European Machinery

Debate of the Day - Daimler Truck's Guide Upgrade, TNA-MB Tug of War

CITI'S TAKE

The debate today with investors following the guide upgrade at DTG last

night (see here) has focused on to what extent this is a low-quality beat vs

Street and how to think about the growth/margin progression into 2027.

We are hearing of bears saying that most of the beat is driven by tariff Klas BergelindAC

relief and with MB's implied weak performance into 2H there is unlikely +44-20-7986-4018

any follow-through to earnings next year. We disagree. We calculate klas.bergelind@citi.com

around 50/50 of the TNA upgrade driven by tariff relief/organic upgrades

Siron Ng and see a likely margin of 11-12% next year in TNA vs 10% Street (11% at

current pricing, 12% if positive price/cost on its EPA offering). Yes, the +44-20-7986-4393

siron.ng@citi.com implied 2026 MB margin of around 6% stands out on the softer side, but

we can still see MSD 2027 upgrades even if the MB EBIT recovery is Martin Wilkie

delayed one year, on our sensitivity. Buy. martin.wilkie@citi.com

Vivek Midha, CFA

Making sense of the TNA guide upgrade - When DTG reported 1Q26 results, vivek.midha@citi.com

management said that the 2026 TNA margin would likely reach the upper end of the Avinash Mundhra

6-8% range vs at the mid-point previously. It now sees a 10% margin at the mid- avinash.mundhra@citi.com

point. With 10k incremental unit sales, this is EUR 560m of incremental EBIT from

TNA. The 10k incremental unit sales at a 20% drop-through is EUR 260m, thus the

tariff incremental boost we think is around EUR 300m vs our EUR 400m annualized

assumption.