Daimler Truck: heavy vehicle is engineered for weighty challenges

“Oh my God, are you not willing to buy me a Mercedes Benz?” Sarah Janice Joplin, satirically. Vehicles bearing the Tristar badge are not ironically appreciated by truck drivers as well as by many car drivers. However, a lack of supply of components is affecting sales of Daimler Truck, which owns the Mercedes brand for heavy vehicles. These only deepen in the wake of the war in Ukraine.

German automakers this week provided a ray of sunshine with first-quarter results. Yochan Getz, the CFO, said bottlenecks in semiconductor supply would improve in the second half, as would sales in North America. A high backlog is evidence of a “strong demand environment.” The first, from 588 million euros a year earlier.

Ukraine is the missing threat in this look back and forth. The suspension of all business activities in Russia left Daimler Truck with a modest impairment of 170 million euros. Analysts who note that many engine blocks originate in South Africa – which is less directly dependent on Russia for energy – are also replacing the sweepstakes. The bigger issue is the impact of the war on the European economy.

The conflict will weigh on customers at least in the coming year. The final impact depends on military and economic developments that no wise expert can do more than guess.

The business at least goes into trouble from a position of relative strength, as reflected in recent earnings performance, and with a medium-priced scenario. Dimler Truck has adequate operating margins, sustainable gear and a portfolio of powerful truck brands, including Mercedes. Benz is just one.

These benefits are reflected in a price / profit ratio of more than seven – a premium to competitors Traton and Iveco, according to S&P CIQ.

The shares themselves are trading in line with the European industry industry in a tight beta version, which means they are modestly below their listing price following a split in parts from carmaker Mercedes-Benz last year. A little sun on the dashboard in the quarterly results will encourage passengers. Occasional hitchhikers – Joplin sings a song about these too – were rescued in February when Russian tanks rolled over.

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Daimler Truck: heavy vehicle is engineered for weighty challenges Source link Daimler Truck: heavy vehicle is engineered for weighty challenges

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