What Does Mercedes-Benz Group’s Recent Nissan Stake Sale Mean for Its Share Price in 2025?

Deciding what to do with Mercedes-Benz Group stock right now? You are far from alone. Investors are watching closely as the iconic automaker’s share price has cooled slightly over the last year, with a recent close at 51.69 and a mixed bag of returns. Over the last seven days, the stock dipped 2.3%, and over the last month, it is down 3.4%. Year-to-date, the trend is still a modest 2.3% lower. However, the three-year and five-year gains tell a different story: up 14.8% and a striking 89.0%, respectively. That blend of short-term volatility and long-term momentum is part of what makes Mercedes-Benz Group such an intriguing case right now.

Much of the recent movement can be traced to shifts in the broader auto sector, from Amazon’s testing of electric vans to Mercedes’ own strategic divestments, such as the pension trust’s high-profile sale of its entire stake in Nissan. These steps reflect a sector recalibrating for the future, with old alliances breaking and new technologies on the horizon. While news flow has caused some knee-jerk reactions, it is the underlying valuation that often cuts through the noise and reveals an opportunity or a risk.

This is where Mercedes-Benz Group’s value score becomes particularly interesting. Out of six valuation checks used to spot undervalued companies, Mercedes-Benz Group passes five, giving it a strong score of 5. Is this enough to put the stock in buy territory? Next, we will break down the key valuation approaches and explain what each one says about Mercedes-Benz’s worth in today’s market. There is an even smarter way to think about valuation discussed at the end of the article.

Why Mercedes-Benz Group is lagging behind its peers

Approach 1: Mercedes-Benz Group Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's fair value by projecting its future cash flows and discounting them back to today's value. For Mercedes-Benz Group, this approach starts with the company’s latest twelve-month Free Cash Flow of €13.26 billion. Analysts supply cash flow estimates for the next five years, with 2029 projections showing Free Cash Flow of €6.34 billion. Estimates for 2030 and beyond are extrapolated by Simply Wall St, based on recent trends and sector expectations.

Using these projections, the DCF model calculates an intrinsic fair value per share of €82.86. This means that, compared to the recent share price of €51.69, the stock appears 37.6% undervalued by this measure. The model relies on the idea that while near-term cash flows may fluctuate, Mercedes-Benz’s long-term ability to generate significant cash remains strong.

The takeaway from this analysis is clear: the stock trades at a notable discount to its estimated fair value, suggesting it could offer upside from current levels.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Mercedes-Benz Group.

Our Discounted Cash Flow (DCF) analysis suggests Mercedes-Benz Group is undervalued by 37.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Mercedes-Benz Group Price vs Earnings

The Price-to-Earnings (PE) ratio is one of the most insightful metrics for valuing profitable companies like Mercedes-Benz Group. Since the company generates consistent earnings, the PE ratio offers a clear window into how the market is pricing each euro of profit.

What makes a “normal” or “fair” PE ratio varies across companies. Generally, businesses with higher expected growth or lower risk tend to justify higher PE ratios, while those with slower growth or higher risk usually trade at lower multiples. This context makes benchmarks especially important when assessing value.

Mercedes-Benz Group currently trades at a PE ratio of 7.3x. This is noticeably lower than the auto industry average of 18.3x and the average among its closest peers, which stands at 11.6x. At first glance, this discount could suggest the market is overlooking some of the company’s strengths.

To go further than basic comparisons, Simply Wall St uses a “Fair Ratio,” which is a proprietary PE measure calculated by factoring in growth prospects, profit margins, market cap, industry positioning, and risk profile. The Fair Ratio for Mercedes-Benz Group is estimated at 11.1x. This method is more nuanced than simply comparing with peers or the industry, as it reflects attributes unique to Mercedes-Benz Group as well as broader sector dynamics.

Comparing the Fair Ratio (11.1x) to the company’s actual PE (7.3x) suggests the stock remains undervalued on this metric, supporting the idea that its current share price could represent an opportunity for value-focused investors.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Mercedes-Benz Group Narrative

Earlier we mentioned there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is a simple but powerful tool that lets you create your own story behind Mercedes-Benz Group’s numbers, showing not just your assumed fair value, but also your expectations for future revenue growth, margins, and earnings. By tying together the company’s unique story, the financial forecast, and an estimated fair value, Narratives help you see not only what you think the business is worth but also why.

Narratives are available to everyone on Simply Wall St’s Community page, making it easy to share your view and compare it against other investors’ perspectives. As new information, news, or earnings are released, Narratives update dynamically, giving you a real-time picture of how a company’s value might be changing. For example, some investors see Mercedes-Benz Group’s fair value as high as €83.0, based on optimism about EVs and premium tech, while others are more cautious, viewing €40.0 as a fair target due to concerns around China and global margins. With Narratives, you can instantly spot where your view aligns, see what others are assuming, and decide clearly if now is the right moment for you to act.

Do you think there's more to the story for Mercedes-Benz Group? Create your own Narrative to let the Community know!

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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