Mercedes-Benz Stock: €5 Billion Cost-Cutting Plan Amid Profit Slump

Mercedes-Benz is implementing substantial strategic changes, announcing an ambitious cost reduction initiative aimed at saving €5 billion by 2027, with half of these cuts targeted for completion by the end of 2025. This strategic shift comes in response to significant financial challenges, as evidenced by the luxury automaker's third-quarter performance in 2023. The company experienced a stark 50% decline in group earnings, which fell to €1.72 billion, while revenue decreased by 6.7% to €34.5 billion. Despite these challenges, the company maintains its commitment to job security in Germany through 2029, addressing concerns about potential workforce reductions.

Market Response Remains Resilient

Despite the challenging business environment, Mercedes-Benz's stock has demonstrated remarkable resilience in the market. The shares recently recorded a 1.4% increase, reaching €57.03, with analysts maintaining an optimistic outlook and setting an average price target of €69.05. This positive market response, coupled with an anticipated dividend of €4.40 per share for the upcoming fiscal year, suggests continued investor confidence in the company's strategic direction, despite ongoing challenges in key markets like China, where premium model sales have underperformed expectations.