Mercedes-Benz group AG- An opportunity to buy/Average down.

قبل ٦ أيام

Hello,

Today we will be looking at a buy opportunity from Mercedes solely using the tools available on Tradingview.

Mercedes-Benz Group AG engages in the business of manufacturing and distributing premium cars. It operates through the following segments: Mercedes-Benz Cars, Mercedes-Benz Vans, and Mercedes-Benz Mobility. The Mercedes-Benz Cars segment includes the brands Mercedes-AMG, Mercedes-Maybach, and Mercedes-EQ. All this is found in overview section tradingview.com/symbols/XETR-MBG/financials-overview/

TECHNICAL ANALYSIS- Checklist

1. Structure drawing (Trend line drawing on past price chart data)
   
2. Patterns identification (Naming patterns on past price chart data for future wave)- The stock has corrected and is at the bottom of a flat pattern
   
3. Future indication (Reading indicator for future wave)- The indicator is confirming purchase. Zero crossover on MACD soon. (MACD) is a technical indicator to help investors identify entry points for buying or selling
   
4. Future wave (Drawing on future price chart using future indication from indicator)- Future wave as shown
   
5. Future reversal point (Identifying trend reversal point on price chart using structure)- Target price EUR 76 (A good stock to buy/average down)
   

Key highlights from the Mercedes-Benz Group's Q3 2024 interim report

• Revenue: €34.5 billion in Q3 2024, a 7% decrease compared to Q3 2023. For the first nine months, revenue totalled €107.14 billion, down by 5%.
  
• Net Profit: €1.7 billion in Q3, down by 54%, and €7.7 billion over nine months, a 31% reduction.
  
• Mercedes-Benz Cars: Unit sales were down by 1% to 503,600 vehicles in Q3. Electrified vehicle sales fell by 15%, and BEV sales dropped by 31%.
  
• Mercedes-Benz Vans: Sales declined by 13% to 91,100 units in Q3. Electrified van sales also decreased by 31%.
  
• Mercedes-Benz Mobility: New financing and leasing contracts fell by 14% compared to Q3 2023
  
• R&D expenditure increased by 13% to €2.9 billion in Q3, with a focus on digitalization and electrification
  

Company highlights can be found on the statements section or the news flow section tradingview.com/news-flow/


Next earnings report date: February 13, 2025 (Q4 report 2024) The next earnings date can be found for each company tradingview.com/symbols/XETR-MBG/financials-earnings/?earnings-period=FQ&revenues-period=FQ

Opportunities

• Mercedes-Benz is a globally recognized and respected brand in premium and luxury automobiles, giving it some resilience against fluctuations in car sales.
  
• The company’s strong focus on research and development, especially in electric powertrains, positions it well for growth as clean-air regulations continue to tighten worldwide.
  
• Management’s long-term goals for return on sales indicate that there is opportunity for further growth, suggesting potential upside to valuation.
  

Risks to consider

• The global premium car market is highly competitive, and consumers have many choices, making it easy for them to switch between brands.
  
• The auto industry faces increasing global overcapacity, leading to pricing pressure. Given its capital-intensive nature, achieving strong economic returns over a 10-year period remains challenging.
  
• While Mercedes has maintained good union relations with its German workforce, union influence is substantial, with employees electing half of the supervisory board members. This strong union presence can limit profit margins due to wage demands during prosperous times and work rules that reduce flexibility in manufacturing.
  

Our recommendation

Since November 2021, Mercedes-Benz stock has traded in a sideways range between EUR 52 and EUR 76. Despite this, the company remains a globally recognized premium and luxury brand. This positioning continues to provide resilience against high sales fluctuations, making it a standout in the competitive global luxury car market. Mercedes-Benz Cars continue to face weaker macroeconomic conditions and fierce competition, mainly in Asia. The company is actively undertaking a share buyback. In Q4 2024 the Mercedes-Benz Group opened Europe’s first battery recycling factory in Kuppenheim, southern Germany. Valuable, limited raw materials such as lithium, nickel and cobalt can be recovered and are to be used to manufacture new battery cells for Mercedes-Benz vehicles. This buyback, along with the company’s strong positioning and stock’s trading range, presents a potential buying opportunity with a target price of EUR 76 despite the weak Q3 results. Our recommendation is buy/Average down. Mercedes-Benz’s commitment to research and development, particularly in electric powertrains, positions it advantageously for growth amid tightening clean-air regulations worldwide.

Goodluck & all the best.