The Mercedes stock has initially dropped after the Q3 figures, but was able to recover slightly in November and is now trading well above 5 percent (as of November 27th, around 10 am). Since mid-June, however, the paper of the Mercedes-Benz Group has lost more than 20 percent – in the current stock market year the share price has dropped by more than 8 percent.

The disappointing share price development in 2023 is attributed to price pressure in electric mobility, mixed prospects and an overall difficult environment. Despite this, the share price is in contradiction to the more than solid figures. In the 3rd quarter, Mercedes-Benz was the most profitable car manufacturer in the world and the stock is still anything but expensive.

Mercedes with a solid 3rd quarter and cautious outlook With a turnover of just over 37 billion euros, the Mercedes-Benz Group generated slightly less than in the same period last year – the EBIT also fell by 7 percent to just over 4.8 billion euros compared to the previous year. The price war for electric models is increasing and higher costs could only be partially offset.

For the current 4th quarter, Mercedes-Benz is somewhat more pessimistic and expects a slightly lower EBIT margin of between 10 and 11 percent in the automotive sector. Nevertheless, this can still be seen, according to consulting firm Ernst & Young (EY) Mercedes-Benz was the most profitable car manufacturer in the world in Q3. The margin was 13 percent – Toyota came in second with 12.6 percent and BMW with 11.3 percent.

Mercedes stock still fairly valued The really big years may be over for now – because the price war for electric models is likely to intensify and the margin is already low here. It is quite possible that Mercedes-Benz will generate slightly less in 2024 and the profit margin will be slightly lower. This is partly how the weak performance of the Mercedes stock can be explained.

Source: https://aktienscreener.com

However, considering the very strong figures – in 2023 the turnover is expected to be around 150 billion euros again, the adjusted operating result around 20 billion euros – and the fundamental valuation, the paper is still by no means too expensive. The P/E ratio for the Mercedes stock is in the range of 5, so there is still room for improvement here.

Most analysts agree with this: The average price potential is seen at 37 percent, the price targets of the last weeks range from 60 euros (Barclays) to 120 euros (Deutsche Bank). For investors, this means: Overall, the chances for the Mercedes stock outweigh the cautious outlook for the coming quarters.