Daimler Truck Stock Drops After Surprise Forecast Downgrade

Daimler Truck’s stock took a sharp hit this week, sliding nearly 7% in early Frankfurt trading after the company cut its full‑year profit forecast. The downgrade came as a surprise to markets that were expecting stable earnings guidance for 2025. Most of the pressure is coming from North America, where truck demand is cooling faster than expected. We’ve seen this region generate almost half of Daimler Truck’s revenue, so even small drops in orders can ripple through results. In this article, we’ll break down what led to the downgrade, how investors reacted, and what it means for the company’s next steps.

Company Overview & Market Context

Daimler Truck Holding AG, based in Germany, is a leading maker of heavy‑duty commercial vehicles, operating global brands such as Freightliner and Western Star. The North American sector is key: in 2024, it made up about 44% of group revenue and delivered a profit margin near 12.9%, far above other regions.

Forecast Downgrade Details

Late July 2025, Daimler Truck revised its adjusted EBIT outlook to €3.6–€4.1 billion, down from the prior €4.7 billion level of 2024. Analysts and investors had expected only a small decrease. Instead, the cut may amount to a 23% decline from last year. CFO Eva Scherer noted that North American orders slowed noticeably following what had been a strong first half of the year. The company adjusted its capacity and reduced volume expectations accordingly.

Market Reaction

Daimler Truck shares dropped nearly 7% on the Frankfurt exchange after the announcement. Pre‑market trading on Tradegate saw a 6.5% drop, pushing the stock back to just above €40, erasing July’s gains above €45 and threatening its short‑term trend line. Analysts like Fabio Hoelscher from Warburg Research called the scale of the drop “unexpected,” noting that the downgrade was larger than the market expected.

Why North America Slowed

Second‑quarter order intake fell short: only 13,800 Class 8 truck orders in North America versus 21,000 expected. This confirmed the deeper dip in demand in Daimler’s most profitable geography.
Ongoing U.S. tariffs on non-U.S. content, around 25%, and retaliatory trade policies have raised costs and clouded planning. These trade pressures, combined with sluggish freight activity, dampened confidence among fleet buyers.
Meanwhile, Daimler has rolled out production flexibility and cut capacity rather than resorting to layoffs. This strategic cost action aims to preserve margins despite falling volumes.

Financial Snapshot & Analyst Views

In Q2 2025, net profit plunged 61% year‑on‑year to €277 million from €742 million. Adjusted EBIT slowed by 4% to €1.12 billion, while revenue dropped about 6% to €11.67 billion. Unit sales fell 5%, delivering 106,715 vehicles compared to 112,195 a year before.
Despite lower volume, Daimler maintained its margin guidance for Trucks North America at 11–13% ROS, signaling good cost discipline despite uncertainty in volumes.
Market analysts are mixed: some maintain Buy/Neutral, others caution that the valuation may already imply stress, especially with Traton and Volvo flagging similar concerns in U.S. markets.

Strategic & Investor Considerations

Risks ahead: Ongoing trade tensions, slack freight activity, and more order weakness could pressure volumes and profit.
Operational resilience: Daimler’s “Stronger 2030” plan targets €1 billion in cost savings in Europe through automation and supply-chain efficiencies. This could help balance out revenue risks coming from the North American market.

Outlook possibilities: If trade policy eases and order intake stabilizes, volumes may rebound. Investors should watch for signs of improvement in North American Class 8 orders.
For investors: The sharp downgrade drags the stock price lower, which may open value for long‑term holders, but only if demand softening reverses. Short-term sentiment could remain cautious until order trends firm up.

Conclusion

Daimler Truck’s latest forecast cut underscores how vulnerable it remains to North American demand swings and global trade dynamics. Shares reacted sharply because this revision exceeded prior expectations. We expect cost controls and tight margin discipline to help offset volume weakness, but the company’s performance now hinges on whether the U.S. heavy‑duty market finds its footing. In sum, Daimler Truck shows resilience, but needs demand recovery to justify its current valuation.

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This content is for informational purposes only and not financial advice. Always conduct your research.