TRATON Stock: Profit Forecast Falls Despite Strong Year

TRATON, Volkswagen's commercial vehicle holding company, exceeded expectations with a 9.2% operating margin in 2024, marking a 0.6 percentage point increase from the previous year. This strong performance translated to earnings per share rising from €4.90 to €5.61, while revenue grew modestly by 1% to €47.5 billion. Shareholders will benefit from an increased dividend of €1.70 per share, up from €1.50. Despite these positive results, TRATON's stock reacted negatively, dropping nearly 8% in trading before settling at around 5% lower. The Munich-based company, which includes MAN, Scania, International, and VW Truck & Bus brands, anticipates a challenging business environment in 2025 due to weakening global economic conditions, particularly affecting its core markets.

Uncertain Outlook Pressures Investor Confidence

The commercial vehicle manufacturer projects 2025 revenue to fluctuate between -5% and +5% compared to 2024 figures, with operating margin expected to decline to between 7.5% and 8.5%. This forecast falls below market expectations of 8.7% and reflects several challenges: unlike early 2024, the company will not benefit from a substantial order backlog entering the new year; startup costs for Scania's new China plant will impact profitability; and geopolitical risks, particularly potential import tariffs in the U.S. market, create additional uncertainty. TRATON sold approximately 70,000 vehicles in the U.S. last year, with 65% produced in Mexico, making the company vulnerable to potential trade tensions.