AB Volvo stock: fair value
VOLV-A.STThe fair value of AB Volvo under our model is $46.20, the price is 30% below.
The fair value is an estimate from our model, not a price target.
Daily figure as of 13 Nov 2026
Valuation signal
Significantly undervaluedIn our model the price counts as cheap below $38.50 and expensive above $57.75 (uncertainty low, based on the price swings of the past year).
The two parts of the fair value come to $46.47 (cash-flow model) and $45.93 (industry comparison), and the gap between them shows how uncertain the estimate is. The price is below both.
Calculated with a cost of equity of 7.4%. At 8.4% the fair value would be $42.32, at 6.4% it would be $51.92.
Where the number comes from
Half from the cash-flow model, half from earnings times the industry P/E (23.8).
Ten-year cash-flow model from smoothed free cash flow and its past growth until it reaches 2.2%. Discounted at 7.4% (government bond yield 2.2% plus beta 1.24 times a risk premium of 4.2%); no analyst estimates were available.
Calculate with your own assumptionsThe calculation step by step
With these figures the cash flow model arrives at $46.47 per share: free cash flow for the next ten years, each year discounted to today at 7.4%, plus the terminal value for the years after. The table explains the calculation; it is not a recommendation.
Calculation as a table
| Year | Free cash flow | Source | Discount factor | Present value (discounted at 7.4%) |
|---|---|---|---|---|
| 2026 | $3.51B | extrapolated at 20.7% | 0.9309 | $3.27B |
| 2027 | $4.04B | extrapolated at 15.2% | 0.8667 | $3.5B |
| 2028 | $4.5B | extrapolated at 11.3% | 0.8068 | $3.63B |
| 2029 | $4.88B | extrapolated at 8.5% | 0.7511 | $3.67B |
| 2030 | $5.2B | extrapolated at 6.6% | 0.6992 | $3.64B |
| 2031 | $5.48B | extrapolated at 5.3% | 0.6510 | $3.57B |
| 2032 | $5.72B | extrapolated at 4.4% | 0.6060 | $3.47B |
| 2033 | $5.93B | extrapolated at 3.7% | 0.5642 | $3.35B |
| 2034 | $6.12B | extrapolated at 3.3% | 0.5252 | $3.22B |
| 2035 | $6.3B | extrapolated at 2.9% | 0.4889 | $3.08B |
| Step | Value |
|---|---|
| Sum of present values (ten years) | $34.37B |
| Terminal value: cash flow 2035 × (1 + 2.2%) / (7.4% − 2.2%) | $122.96B |
| Present value of terminal value (× 0.4889) | $60.12B |
| Equity value (sum plus present value of terminal value) | $94.49B |
| Shares (diluted) | 2.03B |
| Value per share (equity value divided by shares) | $46.47 |
| Earnings per share, last twelve months | $1.93 |
| × 23.8 (industry P/E) | $45.93 |
| Fair value (average of both parts) | $46.20 |
The model uses free cash flow after interest, which belongs to shareholders, discounted at the cost of equity. Net debt is therefore not deducted again.
Data status and sources
- Score
- Daily value of 13 Nov 2026, recalculated nightly
- Price
- Closing price of 12 Nov 2026
- Latest annual report
- Fiscal year 2025, period end 31 Dec 2025
- Currency
- Amounts in US dollars, converted at the ECB reference rate of 12 Nov 2026 ($1 = SEK 9.9729)
- Source
- Financial statements, ratios and prices from Financial Modeling Prep (FMP), based on the company's reports. MEQIRI calculates the score and fair value from them.
Mandatory disclosures for this rating
- ; time horizon around 12 months
- Rated Neutral, published since 7 Nov 2026 (in the score history since 21 Mar 2025)
- Valuation signal Undervalued since 7 Nov 2026
- End-of-day prices, metrics cached for up to 24 hours
- Score and fair value are estimates from a disclosed model. They are not facts and not a price target.
- Produced by SSM Ventures UG (haftungsbeschränkt), responsible person Sven Brostmeyer, Managing Director, automatically according to the disclosed model.
- Not investment advice. Losses up to and including a total loss are possible. Personal circumstances are not considered.