Mercedes-Benz Group (DDAIF) Last Update 7/28/22
Related: F HMC GM TM
% of Stock Price
Revenue
Gross Profits
Free Cash Flow
Mercedes-Benz Group
STOCK PRICE
DIVISION
% of STOCK PRICE
Daimler Mobility
45.3%
$35.96
Net Debt
13.9% $11.01
TOTAL
100%
$79.36
$68.34
Yours
Trefis Price
N/A
$62.22
Market
 
Top Drivers for Period
Key Drivers
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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

Mercedes-Benz Group Company

VALUATION HIGHLIGHTS

  1. Mercedes Benz Cars & Vans constitute 55% of the Trefis price estimate for Mercedes-Benz Group's stock.
  2. Daimler Mobility constitutes 45% of the Trefis price estimate for Mercedes-Benz Group's stock.

WHAT HAS CHANGED?

  1. Latest Earnings

Mercedes-Benz group (formerly Daimler) posted a relatively strong set of Q2 2022 results as the company's strong pricing power for luxury vehicles helped to offset weakness in unit sales. While revenue rose almost 7% year-over-year to 36.5 billion euros (about $37 billion), adjusted operating profits rose 8%. Overall, Mercedes-Benz car sales declined by 6% year-over-year to 487,100 units due to semiconductor supply constraints as well as logistics issues.

  1. Restructuring

At the virtual Extraordinary General Meeting on 1 October 2021, Daimler AG shareholders decided on the company's historic realignment. The spin-off of Daimler’s commercial vehicle business and the subsequent listing of Daimler Truck Holding AG as an independent company on the Frankfurt Stock Exchange were approved by 99.90% of the capital stock represented for the resolution.

Furthermore, the shareholders also approved the renaming of Daimler AG as Mercedes-Benz Group AG effective as of 1 February 2022. The new name emphasizes the future focus on cars and vans of the brands Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach, and Mercedes-EQ

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

  • Total Mercedes Benz Cars Sold Globally:Growth in total Mercedes Benz Cars sold globally is strong, and we expect this growth to continue over our forecast period. We expect this number to grow steadily once the coronavirus pandemic situation gets clearer. Faster growth can lead to a significant upside in our price estimate.

BUSINESS SUMMARY

Daimler AG (Daimler) is the parent company of the Daimler Group. The company is engaged in developing, manufacturing, distributing, and selling a wide range of automotive products but mainly passenger cars, trucks, vans, and buses. Daimler has operations mainly in the US and Germany and sells its vehicles worldwide under various brands such as Mercedes-Benz, Maybach, Smart, Freightliner, Fuso, Western Star, Detroit Diesel, BharatBenz, Orion, and Setra.

SOURCES OF VALUE

The Mercedes Benz Cars division is the most valuable business for Daimler AG. It is more valuable than all the other divisions combined.

We estimate that the high prices and unit sales of Mercedes Benz contribute the maximum value for its business. Mercedes Benz can fetch higher prices because of its strong brand name. It hopes to tap into emerging markets such as China, India, Russia, and Latin America, to help increase sales and grow market share. The International vehicle market is three-and-a-half times larger than the North American vehicle market.

KEY TRENDS

Mercedes-Benz aims to penetrate the electric vehicle market

  • Demand for electric vehicles is rapidly rising around the world mainly due to a relatively less harmful impact on the environment and lower running costs as compared to gasoline-powered engines. In addition, governments around the world provide various incentives to boost electric vehicle sales. Moreover, plugin electric vehicles (PEVs) also have lower battery prices, adding to their appeal. However, sales of these vehicles haven't picked up as previously estimated, primarily due to lower ranges and a lack of infrastructure supporting battery charging.
  • But with more and more companies developing electric cars with higher ranges and building charging stations, plug-in sales are expected to continue growing at a fast pace.
  • By 2030, Mercedes-Benz Cars aims to electrify its complete range of passenger cars. In total, they plan to offer more than 130 electrified vehicles.

Fast-growing luxury vehicle market in China to provide growth impetus

  • Consumption of young-generation consumers (ages below 35) is growing at 14% annually, which is twice that of consumers older than 35. The newer generation also typically has a more sophisticated taste and is more free-spending. The growth in the upper-middle class and the emergence of the new generation are expected to increase sales of high-value products, including automobiles.