Major Banks Slash Valuation Targets as Carmaker Plunges into Massive Losses

2026-10-26 companies

Gothenburg, Monday, 26 October 2026.
Investment banks slashed targets near fifty percent following a catastrophic quarterly loss of SEK 5.6 billion and plans to cut 2,500 jobs.

Catastrophic Earnings Trigger Market Shock

Volvo Car AB (STO: VOLCAR-B) delivered a historic earnings report on 23 October 2026, revealing a catastrophic third-quarter loss of SEK 5.6 billion—nearly 6.2 times worse than the SEK 0.9 billion loss forecasted by analysts [5]. Revenue for the quarter plunged 23% year-over-year to SEK 66.9 billion, marking the lowest quarterly revenue since the company’s 2021 stock market debut [5]. The company’s cash flow turned negative, with a SEK 8.9 billion outflow for the quarter, leaving its net cash position at a mere SEK 1 billion, down from SEK 27 billion in the same period last year [5].

Job Cuts and Cost-Cutting Measures Announced

In response to the financial crisis, Volvo Car announced plans to eliminate 2,500 global positions, including 2,000 in Sweden, as part of a SEK 5 billion cost-cutting initiative [5]. The company also abandoned its full-year 2026 outlook, citing an increasingly challenging market environment and deteriorating prospects for the coming quarters [5]. The announcement followed a historic share price decline of up to 30% on the Stockholm Stock Exchange [5].

Bank Analysts Respond with Broadside of Target Cuts

Major investment banks responded to Volvo Car’s earnings disaster and gloomy outlook with sweeping reductions to their price targets. JPMorgan Chase slashed its target price by -44.444% to SEK 10 from SEK 18, while maintaining a neutral rating [3]. DNB Carnegie followed with a cut from SEK 18 to SEK 11 and reiterated its hold recommendation [1]. Deutsche Bank, which adjusted its target for AB Volvo (STO: VOLV-B) parent company by just SEK 1 to SEK 336 from SEK 337, issued a broader series of reductions for Volvo Car, including a cut from SEK 13 to SEK 9 and from SEK 290 to SEK 285 across different ratings [2]. Oddo raised its target to SEK 310 from SEK 300 but maintained a neutral stance, while Pareto Securities boosted its target to SEK 385 from SEK 400 with a buy rating [2]. Nordea bucked the trend with a bullish outlook, predicting a 20% increase in operating profit for 2027 [2].

Market Sentiment and Investor Activity

Despite the catastrophic report, net buying activity surged on Swedish retail platforms. Avanza’s customers made Volvo Car the most net-bought stock of the day, with purchases exceeding sales by a ratio of 7:1 [4]. Elin Benjaminsson, Avanza’s market strategist, noted that this was the second time in September that retail investors had attempted to ‘catch a falling knife,’ a strategy that had failed to yield positive returns to date [4]. The company’s share price, already at a record low of SEK 18.87, continued its descent into uncharted territory, trading 70.69% below its 52-week high of SEK 65.50 reached in December 2025 [6].

Sources

Volvo Analyst ratings