I currently see a buying opportunity in Mercedes-Benz ($MBG (+0,04%)), here's why:
Image source: Dyer & Blair Investment Bank
Mercedes-Benz, as most people here will know, operates in the premium automotive sector and comprises the Mercedes-Benz Cars, Mercedes-Benz Vans and Mercedes-Benz Mobility segments. The brand benefits from its strong position and has a focus on premium and luxury vehicles.
Technical analysis - checklist:
- Structure drawing: The price shows a correction and is at the lower end of a flat pattern
- Pattern recognition: The stock has traversed a flat trend and is currently in a favorable position for an upward move
- Future indicator: The MACD indicator confirms a buy signal and is close to a zero crossover, suggesting a good entry point
- Future wave: Based on the indicator, a future upward wave can be seen
Highlights from the Q3 2024 report:
- Revenue: EUR 34.5 billion in Q3, down 7% year-on-year. Over the first nine months: EUR 107.14 billion, a decrease of 5%
- Net profit: EUR 1.7 billion in Q3 (-54%), over nine months EUR 7.7 billion (-31%)
- Mercedes-Benz Cars: Unit sales down 1% to approx. 504,000 vehicles. Electrified vehicles -15%, BEV sales -31%
- Mercedes-Benz Vans: Sales down 13% to approx. 91,000 units. Electrified vans also -31%
- Mercedes-Benz Mobility: New financing and leasing contracts fell by 14%
- R&D expenditure: Increase of 13% to EUR 2.9 billion, with a focus on digitalization and electrification
Opportunities:
- Mercedes-Benz remains strong as a global premium brand and offers stability in volatile markets
- Focus on electromobility and digitalization positions the company well for long-term growth
- Long-term management targets for return on sales open up further potential for value enhancement
Risks:
- The market is highly competitive and customers can switch between many brands
- High production capacities worldwide increase price pressure and impact profit margins
- Trade unions in DE have a strong influence and can limit flexibility in production
Conclusion:
Mercedes-Benz remains a globally respected brand. The share has been trading in a range between EUR 52 and EUR 76 since 2021. The combination of the ongoing share buyback and the recently opened battery recycling factory in Kuppenheim demonstrates the commitment to long-term sustainability and growth. Dyer and Blair see the price target in the EUR 76 range and I agree with this assessment.
Basis of my mini analysis:
- Dyer & Blair investment Bank, Kenya
- https://group.mercedes-benz.com/documents/investors/reports/interim-reports/q3/mercedes-benz-interim-report-q3-2024.pdf
- https://de.tradingview.com/symbols/XETR-MBG/technicals/
- https://www.wsj.com/business/earnings/mercedes-benz-earnings-slump-on-tough-economic-backdrop-fierce-competition-3a1387c3
This is my first analysis here on getquin, so please take it with a grain of salt. I look forward to your feedback and am open to constructive criticism :)
