Mercedes-Benz Stock: Profits Slump Triggers Share Price Drop

Mercedes-Benz experienced a significant downturn in its financial performance for fiscal year 2024, with net profit declining by 28 percent to €10.4 billion and revenue falling 4.5 percent to €145.6 billion. The market reacted swiftly to these disappointing results, with the company's stock price dropping 2.6 percent to €58.07 in XETRA trading. This represents a considerable distance from its 52-week high of €77.45, highlighting the current challenging phase for the luxury automaker. The overall market sentiment remained cautious, with Germany's DAX index also recording modest losses.

Analysts Maintain Positive Outlook

Despite the current headwinds, market analysts maintain an optimistic stance on Mercedes-Benz's future prospects. The average price target stands at €67.10, suggesting a potential upside of over 15 percent from current levels. Notably, Bernstein Research has recently upgraded their price target from €60 to €62, citing impressive strategic developments presented at the company's recent capital markets day. However, investors should note that dividend expectations have been adjusted downward, with projections for the current year at €4.35 per share, compared to the previous year's €5.30.