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Mercedes-Benz Group Ag (DE:MBG)
:MBG
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Mercedes-Benz Group
(OTC:MBG)
75Outperform
Positive Factors
Earnings Performance
The EBIT margin for Cars was 8.1% after adjustment, which is higher than the consensus of 7.8%.
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
Management proposes a new EUR5bn share buyback over 24 months, subject to AGM approval.
Negative Factors
Earnings Forecast
The earnings forecast cut leads to a reduction in the target price from €62 to €57, reflecting the challenges posed by the tariff situation.
Pricing Environment
Mercedes' 'value over volume' strategy could come under pressure due to US tariff headwinds and weakening pricing power in the US.
US Tariff Policy
Mercedes is the most exposed to US's auto tariffs among EU OEMs.
Mercedes-Benz Group (MBG) vs. S&P 500 (SPY)
Market Cap
€50.90B
Dividend Yield9.91%
Average Volume (3M)3.48M
Price to Earnings (P/E)5.9
Beta (1Y)1.12
Revenue Growth-5.69%
EPS Growth-29.34%
CountryDE
Employees163,132
SectorConsumer Cyclical
Sector Strength60
IndustryAuto - Manufacturers
Share Statistics
EPS (TTM)1.74
Shares Outstanding962,903,700
10 Day Avg. Volume3,282,251
30 Day Avg. Volume3,484,603
Financial Highlights & Ratios
PEG Ratio-0.50
Price to Book (P/B)0.52
Price to Sales (P/S)0.00
P/FCF Ratio3.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€60.83Price Target Upside15.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Mercedes-Benz Group Business Overview & Revenue Model
Company DescriptionMercedes-Benz Group AG operates as an automotive company in Germany and internationally. The company develops, manufactures, and sells passenger cars comprising premium and luxury vehicles of the Mercedes-Benz brand, including the Mercedes-AMG, G-Class, Mercedes-Maybach, and Mercedes-EQ brands, as well as small cars under the smart brand; ecosystem of Mercedes-Benz under the Mercedes me brand; and vans under the Mercedes-Benz and Freightliner brands, as well as related spare parts and accessories. It also provides financing and leasing packages for end-customers and dealers; automotive insurance brokerage and banking services; car subscription and car rental, and fleet management, as well as digital services for charging and payment; and mobility services. The company was formerly known as Daimler AG and changed its name to Mercedes-Benz Group AG in February 2022. Mercedes-Benz Group AG was founded in 1886 and is headquartered in Stuttgart, Germany.
How the Company Makes MoneyMercedes-Benz Group generates revenue through the sale of its luxury vehicles and vans, which includes both new and certified pre-owned cars. The company's revenue model is supported by vehicle sales, after-sales services, and financial services. After-sales services encompass parts, maintenance, and repairs, driving additional income post-purchase. The financial services division provides customer financing, leasing options, insurance, and fleet management services, facilitating vehicle acquisitions while adding a significant revenue stream. Additionally, strategic partnerships and collaborations in technology, such as with software and battery manufacturers, enhance its product offerings and market reach. The company's commitment to innovation, particularly in electric vehicles and sustainable energy solutions, also contributes to its future revenue growth by attracting environmentally conscious consumers and aligning with global sustainability trends.
Mercedes-Benz Group Financial Statement Overview
Summary
Mercedes-Benz Group exhibits strong financial performance with high profitability and efficient cash flow management, despite minor revenue fluctuations. The company maintains a robust balance sheet with manageable debt levels, ensuring a healthy financial outlook.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 | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 142.94B | 145.59B | 153.22B | 150.02B | 133.89B | 121.78B | Gross Profit |
| 28.03B | 28.58B | 34.63B | 32.58B | 29.37B | 18.66B | EBIT |
| 10.40B | 12.30B | 15.85B | 17.46B | 14.89B | 6.09B | EBITDA |
| 18.79B | 16.73B | 27.44B | 32.83B | 19.09B | 11.91B | Net Income Common Stockholders |
| 8.91B | 10.21B | 14.26B | 14.50B | 10.66B | 3.63B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 25.12B | 18.61B | 18.99B | 20.06B | 24.32B | 25.51B | Total Assets |
| 261.26B | 265.01B | 263.02B | 258.89B | 258.62B | 284.18B | Total Debt |
| 86.79B | 112.80B | 87.21B | 84.41B | 93.85B | 114.76B | Net Debt |
| 75.04B | 101.27B | 71.25B | 70.32B | 75.81B | 94.42B | Total Liabilities |
| 165.93B | 171.38B | 170.21B | 173.47B | 186.66B | 223.49B | Stockholders Equity |
| 94.31B | 92.63B | 91.77B | 85.42B | 71.95B | 60.69B |
| Cash Flow | Free Cash Flow | ||||
| 13.21B | 9.07B | 6.26B | 13.41B | 19.97B | 16.59B | Operating Cash Flow |
| 19.14B | 17.73B | 14.47B | 16.89B | 24.55B | 22.33B | Investing Cash Flow |
| -11.21B | -8.75B | -7.32B | -3.45B | -6.23B | -6.42B | Financing Cash Flow |
| -13.38B | -10.75B | -8.39B | -19.03B | -19.06B | -10.75B |
Mercedes-Benz Group Technical Analysis
Positive
52.86
Price Trends
51.00
Positive
51.54
Positive
51.95
Positive
Market Momentum
0.42
Negative
65.10
Neutral
33.91
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 52.86 is above the 20-day moving average (MA) of 48.48, above the 50-day MA of 51.00, and above the 200-day MA of 51.95, indicating a bullish trend. The MACD of 0.42 indicates Negative momentum. The RSI at 65.10 is Neutral, neither overbought nor oversold. The STOCH value of 33.91 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 (61)
Financial Indicators
Performance Comparison
DE:MBG
Mercedes-Benz Group
52.86
-10.06
-15.98%
BAMXF
Bayerische Motoren Werke Aktiengesellschaft
90.54
-18.46
-16.94%
GB:0H9X
Fresenius Medical Care AG & Co. KGaA
50.36
11.39
29.23%
GB:0Q8F
Hugo Boss
41.24
-6.16
-13.00%
GB:0P6O
Volkswagen
101.15
-8.47
-7.73%
CTTAF
Continental Aktiengesellschaft
84.13
21.32
33.94%
Mercedes-Benz Group Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q4-2024)
| % Change Since: 6.48%|
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.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.