- Volvo, manufacturer of trucks, buses and equipment, did quite well for the FY but there are headwinds on the horizon.
- China's economic woes are an issue for the equipment segment, and semiconductor shortages are stymying hope for sales growth.
- Freight conditions are making things good for some of their markets, but semiconductor shortages have simply made capitalising on this less possible for Volvo.
- There's a lot of commodity exposure in Nickel, Aluminum and Rubber as well that makes us wary of automotive exposures.
- However, we're back to pre-COVID price levels in stock price, and the multiple is very low, so we're not turned off despite meaningful headline risks.
For further details see:
Volvo Hit By China Economic Woes And Semiconductor Shortage Persists