Mercedes-Benz (XTRA:MBG) Valuation in Focus After Sales Drop and Strategic Overhaul

Mercedes-Benz Group (XTRA:MBG) just reported quarterly results revealing declines in vehicle sales, especially in China and the US, due to tariff challenges and intensifying competition from local players.

See our latest analysis for Mercedes-Benz Group.

Despite headline sales dropping in China and the US, Mercedes-Benz Group's share price has been resilient, hovering near €53.2. Recent 3-month and year-to-date share price returns are positive. Over the past year, total shareholder return has essentially held steady. The impressive 25% total return over three years and 79% across five points to strong long-term wealth creation for those who stuck with the stock.

If shifting demand and industry shake-ups have you thinking about what other automakers are riding out the storm, explore See the full list for free..

With Mercedes-Benz shares holding steady despite softer sales and ongoing market headwinds, investors are left to wonder if the current weakness is an opportunity to buy into an undervalued automotive leader, or if the market is already pricing in future growth.

Most Popular Narrative: 11.5% Undervalued

Mercedes-Benz Group’s most-cited narrative calculates a fair value above the current share price, signaling the market may be discounting future earnings potential. Investors are weighing whether recent headwinds will derail the ambitious transitions built into this valuation story.

The upcoming launch of over 25 new models, including core segment EVs built on the advanced, flexible Mercedes-Benz Electric Architecture (MB.EA), positions Mercedes-Benz to capitalize on the global shift toward electric vehicles and premium electrification. This supports future revenue growth and higher average selling prices. Strategic emphasis on proprietary digital platforms, notably the MB.OS operating system, will enable Mercedes-Benz to generate high-margin, recurring revenue through over-the-air updates and connected services. This is expected to drive long-term improvement in operating margins and earnings.

Read the complete narrative.

Want to know which bold moves fuel Mercedes-Benz’s valuation edge? The secret recipe involves electrification, recurring digital revenues, and a profit leap the analysts are baking in. Find out which assumptions could make or break this forecast.

Result: Fair Value of €60.08 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weak demand in China and mounting tariff pressures could disrupt Mercedes-Benz's profit recovery and challenge the optimistic view that the company is undervalued.

Find out about the key risks to this Mercedes-Benz Group narrative.

Build Your Own Mercedes-Benz Group Narrative

If you think the current story misses the mark or simply want to run your own numbers, you can craft your personal Mercedes-Benz Group narrative in just a few minutes, starting here: Do it your way.

A great starting point for your Mercedes-Benz Group research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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