Stock Markets July 8, 2026 02:02 AM

Barclays Lifts Daimler Truck to Overweight, Citing North America Recovery and European Cost Cuts

Analysts raise price target to €55 and forecast rising margins and group EBIT through 2028 as North American orders convert into deliveries

By Sofia Navarro
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Barclays upgraded Daimler Truck from equal weight to overweight and increased its price target to €55, pointing to an expected recovery in North America, an ongoing European cost reduction programme, and a valuation gap versus peers. The broker said Q1 2026 was the trough of the cycle and that order momentum since late 2025 should lift deliveries from Q2, supporting margin and earnings upgrades through 2028.

Barclays Lifts Daimler Truck to Overweight, Citing North America Recovery and European Cost Cuts
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Key Points

  • Barclays upgraded Daimler Truck to overweight and raised its price target to €55, citing North American recovery, European cost reductions and a peer valuation discount.
  • Analysts see Q1 2026 as the trough of the truck cycle, with order momentum from late 2025 converting into deliveries from Q2, supporting margin expansion in North America and higher group adjusted EBIT through 2028.
  • Formation of Archion via the Mitsubishi Fuso-Hino combination is expected to generate up to €2.0 billion by March 2027, underpinning a relaunched €2.0 billion share buyback and providing balance sheet support.

Barclays has upgraded Daimler Truck to an "overweight" rating from "equal weight" and raised its 12-month price target to €55 from €45. The broker cited three core drivers behind the move: improved prospects in North America, continued execution of a European cost reduction programme, and a valuation discount to peers that analysts said is "increasingly difficult to justify."

In the broker's view, Daimler Truck Group - hereafter DTG - offers the clearest path to earnings upgrades, multiple expansion and share price outperformance among the three European truckmakers it covers. Barclays kept Traton Group at "equal weight" with a new €40 target and maintained an "underweight" stance on Volvo AB with a new SEK 290 target.

Barclays characterised Q1 2026 as the trough of the truck cycle and said that the order momentum that began in late 2025 is now beginning to translate into deliveries starting in Q2. On the North American Class 8 market specifically, the broker described conditions as entering a "supply-driven upcycle, supported by industry capacity reductions, tighter driver regulations and improved visibility on tariffs/EPA27 regulation."

For DTG, Barclays singled out the company as likely to be "the only European truck OEM capable of upgrading its North America guidance" at the upcoming Q2 reporting season on August 7. The analysts model Trucks North America adjusted EBIT margin at 9.6% in 2026, which sits above DTG's stated guidance range of 6% to 8% for that business. They project further margin expansion to 11.2% in 2027 and 11.8% in 2028.

At the group level, Barclays forecasts adjusted EBIT of €3.64 billion in 2026, rising to €4.41 billion in 2027 and €5.14 billion in 2028, compared with an actual €3.50 billion in 2025.

The broker also referenced the formation of Archion through the Mitsubishi Fuso-Hino combination. Barclays said this transaction is expected to generate "up to €2.0 billion of proceeds by March 2027," which the analysts view as providing balance sheet support for a relaunched €2.0 billion share buyback programme.

Valuation differentials play a key role in Barclays' thesis. The analysts noted that DTG trades at roughly a 25% discount to Volvo Group and a 45% discount to PACCAR on a 12-month forward price-to-earnings basis. Barclays argued that earnings momentum and the company's self-help measures should contribute to narrowing that gap.

On the cost side, Barclays said the "Cost Down Europe" programme still has a "significant portion" yet to be delivered, a factor the analysts regard as providing margin support that is less dependent on the macro backdrop.

Looking at the wider trucking sector, Barclays observed that many of the investor concerns affecting European automakers do not apply to trucks. Specifically, the broker listed issues such as China profit pool erosion, overcapacity and pricing normalisation as mostly irrelevant for truckmakers, and added that EU truck valuations "screen very favourably versus Capital Goods/Industrials."


Context on analyst positioning and peers

Barclays positioned DTG ahead of Traton Group and Volvo AB among the covered European truckmakers. Traton was left at equal weight with a €40 target while Volvo was retained at underweight with a SEK 290 target. The analysts' view of DTG is anchored on the company's expected ability to convert North American order momentum into improved deliveries and results, alongside ongoing European cost reductions and potential balance sheet support from Archion-related proceeds.


Financial projections cited by Barclays

  • Trucks North America adjusted EBIT margin: 9.6% in 2026; 11.2% in 2027; 11.8% in 2028.
  • Group adjusted EBIT: €3.64 billion in 2026; €4.41 billion in 2027; €5.14 billion in 2028; compared with €3.50 billion in 2025 actuals.
  • Archion proceeds expected up to €2.0 billion by March 2027 and a relaunched €2.0 billion buyback programme referenced as balance sheet support.

The outlook and projections above reflect Barclays' analysis and expectations as stated by the broker.

Risks

  • Execution risk tied to the "Cost Down Europe" programme - Barclays notes a significant portion remains to be delivered, which means margins depend on successful implementation.
  • Recovery in North America underpins much of the positive outlook; if order-to-delivery conversion or the supply-driven upcycle assumptions do not materialize, margin and earnings upgrades could be delayed.
  • Expected proceeds from the Archion formation are described as "up to €2.0 billion" by March 2027; the relaunch of a €2.0 billion buyback and related balance sheet support therefore depends on those proceeds being realized as anticipated.

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