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Mercedes-Benz Group (DE:MBG)
XETRA:MBG
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Mercedes-Benz Group
(XETRA:MBG)
Rating:78Outperform
Price Target:
€60.00
▲(15.58%Upside)
Positive Factors
Cost-Cutting Initiatives
Mercedes is pursuing a 'Next Level Performance' €5bn cost-cutting/returns enhancing programme.
Free Cash Flow
A clear positive message is implied by at least 14% upside to the full year FCF estimates and around 50% upside to the Q4 FCF consensus.
Shareholder Returns
Mercedes' commitment to strong shareholder returns remains unaffected by the current turmoil, indicating resilience despite the challenges.
Negative Factors
Guidance and Financial Performance
Mercedes is guiding for Group revenue slightly below prior-year level, Group EBIT and free cash flow significantly below prior-year level.
Strategy Execution Risks
The recommendation for Mercedes has been downgraded to Fully Valued due to concerns over its ability to execute its 'value over volume' strategy amid a weakening pricing environment.
Tariff Impact
The impact of tariffs on Mercedes' FY25 margins is estimated to be significant, with 300bps for Cars and 200bps for Vans.
Mercedes-Benz Group (MBG) vs. iShares MSCI Germany ETF (EWG)
Market Cap
$49.68B
Dividend Yield8.33%
Average Volume (3M)2.06M
Price to Earnings (P/E)5.8
Beta (1Y)1.15
Revenue Growth-5.69%
EPS Growth-29.34%
CountryDE
Employees163,132
SectorConsumer Cyclical
Sector Strength65
IndustryAuto - Manufacturers
Share Statistics
EPS (TTM)1.74
Shares Outstanding962,903,700
10 Day Avg. Volume1,874,794
30 Day Avg. Volume2,056,373
Financial Highlights & Ratios
PEG Ratio-0.51
Price to Book (P/B)0.54
Price to Sales (P/S)0.00
P/FCF Ratio3.83
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$60.60Price Target Upside16.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Mercedes-Benz Group Business Overview & Revenue Model
Company DescriptionMercedes-Benz Group (MBG) is a leading global automotive company renowned for its luxury vehicles, including cars, vans, and trucks. Headquartered in Stuttgart, Germany, the company operates through several divisions, with Mercedes-Benz Cars being the most prominent. MBG is celebrated for its commitment to innovation, quality, and sustainability, offering a range of vehicles that combine performance with advanced technology. The company also invests in the development of electric vehicles and digital services, reinforcing its position as a pioneer in the automotive industry.
How the Company Makes MoneyMercedes-Benz Group primarily generates revenue through the sale of its luxury vehicles, including passenger cars and commercial vehicles. The company sells these vehicles through a global network of dealerships and direct sales channels. Another significant revenue stream comes from its financial services division, which provides financing, leasing, and insurance solutions to customers purchasing Mercedes-Benz vehicles. Additionally, MBG earns income from after-sales services, including maintenance, repair, and the sale of spare parts. The company's commitment to innovation has also led to investments in electric mobility and digital services, which are expected to contribute to future revenue growth. Strategic partnerships with technology companies and investments in autonomous driving technologies further enhance its revenue potential.
Mercedes-Benz Group Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q4-2024)
| % Change Since: 4.57%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed sentiment with notable financial achievements and strategic advancements in electric vehicles and cost efficiency. However, challenges in the Chinese market and the impact of CO2 compliance costs present significant hurdles. The overall sentiment is neutral as the highlights and lowlights are balanced.Q4-2024 Updates
Positive Updates
Strong Financial Performance
Mercedes-Benz reported a €9.2 billion free cash flow and maintained a net industrial liquidity of around €35 billion despite macroeconomic challenges and market conditions in 2024.
Van Division Success
The Van division achieved unusually high profitability with a double-digit margin, attributed to a strong product portfolio and disciplined pricing.
Electric Vehicle Leadership
Mercedes-Benz is the EV leader in the E-Class and S-Class segments in most markets, maintaining a strong position despite market pressures.
Innovations in Mobility
Development of the Mercedes-Benz charging network is underway, enhancing convenience for electric vehicle customers.
Cost Efficiency Achievements
Mercedes-Benz achieved a 19% reduction in fixed costs compared to 2019, net of inflation, and increased ASP by almost 40% between 2019 and 2024.
Negative Updates
Challenges in China Market
Mercedes-Benz faced subdued consumer sentiment in China, affecting revenues and profitability, with a competitive environment expected to continue in 2025.
Lower Contribution from BBAC
The contribution from BBAC is expected to be lower in 2025, posing a challenge for maintaining overall profitability.
CO2 Compliance Costs
The CO2 compliance costs are expected to have a significant impact on the van division's margin, contributing to a decrease from 14.6% in 2024 to 10-12% in 2025.
Company Guidance
In the recent Capital Market Day and Annual Results Conference for 2024, Mercedes-Benz provided an extensive overview of their financial performance and strategic outlook. The company reported a €9.2 billion free cash flow despite challenging market conditions, particularly in China, and managed to return around €10 billion to shareholders through dividends and share buybacks. Net industrial liquidity remained robust at approximately €35 billion. Mercedes-Benz highlighted their strategic focus on electric vehicles (EVs), with significant investments planned for upcoming EV models, although they acknowledged the transition might take longer than anticipated. In terms of market performance, Mercedes-Benz maintained or increased market share in various segments, with particularly strong results in the Van division, which achieved a 14.6% return on sales. For 2025, the company forecasts a group revenue slightly below 2024 levels, with EBIT and cash flow significantly below due to anticipated market challenges and investments. The company aims for a 6% to 8% margin in the car division and a 10% to 12% margin in the Van division, with a continued focus on cost efficiency to mitigate external pressures.Mercedes-Benz Group Financial Statement Overview
Summary
Mercedes-Benz Group demonstrates strong financial health with excellent profitability and efficient cash flow management. Despite minor revenue fluctuations, the company maintains a solid balance sheet with manageable debt levels.Income Statement
Mercedes-Benz Group demonstrates strong profitability with a consistent gross profit margin over recent periods. The TTM (Trailing-Twelve-Months) data shows a Gross Profit Margin of 19.62% and a Net Profit Margin of 6.23%. However, revenue has shown some fluctuation, with a slight decrease of 1.82% from the previous year. Despite this, the EBIT and EBITDA margins remain robust at 7.28% and 13.14% respectively, indicating effective cost management and operational efficiency.78
Positive
Balance Sheet
The company's balance sheet reveals a stable financial structure with a moderate Debt-to-Equity Ratio of 0.92, reflecting a balanced approach to leveraging. Return on Equity (ROE) stands at 9.45%, which is healthy, showing effective use of equity to generate profits. The Equity Ratio is 36.09%, indicating a solid equity base, but there's room for improvement in reducing liabilities.75
Positive
Cash Flow
Mercedes-Benz Group's cash flow position is strong, with a positive Free Cash Flow of €13.21 billion in the TTM period, showing significant growth from the prior year. The Operating Cash Flow to Net Income ratio is 2.15, reflecting efficient cash generation relative to profits. The Free Cash Flow to Net Income Ratio is 1.48, highlighting robust cash flow relative to earnings, supporting future investments and debt repayments.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 145.59B | 153.22B | 150.02B | 133.89B | 121.78B |
| Gross Profit | 28.58B | 34.63B | 32.58B | 29.37B | 18.66B |
| EBITDA | 16.73B | 27.44B | 32.83B | 19.09B | 11.91B |
| Net Income | 10.21B | 14.26B | 14.50B | 10.66B | 3.63B |
Balance Sheet | |||||
| Total Assets | 265.01B | 263.02B | 258.89B | 258.62B | 284.18B |
| Cash, Cash Equivalents and Short-Term Investments | 18.61B | 18.99B | 20.06B | 24.32B | 25.51B |
| Total Debt | 112.80B | 87.21B | 84.41B | 93.85B | 114.76B |
| Total Liabilities | 171.38B | 170.21B | 173.47B | 186.66B | 223.49B |
| Stockholders Equity | 92.63B | 91.77B | 85.42B | 71.95B | 60.69B |
Cash Flow | |||||
| Free Cash Flow | 9.07B | 6.26B | 13.41B | 19.97B | 16.59B |
| Operating Cash Flow | 17.73B | 14.47B | 16.89B | 24.55B | 22.33B |
| Investing Cash Flow | -8.75B | -7.32B | -3.45B | -6.23B | -6.42B |
| Financing Cash Flow | -10.75B | -8.39B | -19.03B | -19.06B | -10.75B |
Mercedes-Benz Group Technical Analysis
Positive
51.91
Price Trends
51.32
Positive
51.24
Positive
51.24
Positive
Market Momentum
0.46
Negative
54.56
Neutral
64.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:MBG, the sentiment is Positive. The current price of 51.91 is above the 20-day moving average (MA) of 50.58, above the 50-day MA of 51.32, and above the 200-day MA of 51.24, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 54.56 is Neutral, neither overbought nor oversold. The STOCH value of 64.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:MBG.
Mercedes-Benz Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $49.68B | 5.82 | 9.32% | 8.33% | -5.69% | -29.34% | |
78 Outperform | $50.97B | 8.09 | 7.02% | 5.09% | -10.13% | -37.28% | |
76 Outperform | €47.68B | 5.05 | 5.52% | 7.06% | 1.62% | -38.38% | |
74 Outperform | $15.21B | 11.80 | 10.07% | 3.32% | -14.83% | 78.73% | |
70 Neutral | €13.27B | 31.71 | 13.95% | 2.13% | -1.57% | -26.71% | |
63 Neutral | $16.78B | 10.88 | -7.08% | 3.04% | 1.73% | -25.15% | |
56 Neutral | €10.44B | 2.05 | 5.60% | ― | ― |
* Consumer Cyclical Sector Average
Performance Comparison
DE:MBG
Mercedes-Benz Group
51.91
-6.56
-11.22%
DE:CON
Continental Aktiengesellschaft
76.00
20.67
37.37%
DE:BMW
Bayerische Motoren Werke Aktiengesellschaft
83.84
-0.96
-1.14%
DE:VOW3
Volkswagen
90.32
-8.75
-8.83%
DE:KBX
Knorr-Bremse AG
83.85
11.83
16.43%
DE:PAH3
Porsche Automobil Holding
34.20
-6.10
-15.14%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.