Traton's Mid-Year Crossroads: Stability Or Springboard?

2025-06-30 11:26:55 ET

Traton SE: The Company

Traton SE ( OTCPK:TRATF , OTCPK:TRATY ) is a German-Swedish truck manufacturing company, owned 87.5% by Volkswagen AG ( VWAGY ), and it comprises four different divisions: Scania, MAN, International (formerly Navistar), and Volkswagen Truck and Bus. Scania is a premium Swedish brand that has been able to keep the company's margin up, competing with AB Volvo (publ) ( VOLAF ), ( VLVLY ) and PACCAR Inc ( PCAR ). The German brand MAN, on the other hand, was the weak business of the group, with margins barely staying afloat above zero. Well, after Traton's s pin-off, the picture started changing with MAN becoming increasingly profitable and recently achieving a RoS above 7%. This is why I wrote last year that Traton's turnaround has been nothing but spectacular. Thanks to this improvement, the group as a whole is coming close to a RoS between 9% and 10%, which is the long-term target to be aligned with the best players in the industry. As we entered 2025, however, I revised my rating and downgraded Traton from buy to hold, which means I wasn't expecting overperformance as in the past. As a matter of fact, the stock is down 15% since February while the market is more or less flat....

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