Bank of America is repeating its buy recommendation for truck and bus manufacturer Volvo ahead of its second-quarter interim report. The target price is SEK 340 per share, which gives upside potential of 30 percent. This is according to a recent analysis.

The research firm has Volvo as its top pick among European truck manufacturers. Bank of America believes that the company's key markets in trucks and construction equipment are on the verge of recovery. Volvo's margins can therefore be expected to improve going forward.

Bank of America believes that order intake may surprise on the upside in the second quarter, despite weakness in the North American market. This could support the share price and lead to a higher valuation.