Mercedes-Benz Stock: Analysts Remain Cautiously Optimistic

The Mercedes-Benz share gained 0.8 percent in Thursday's XETRA trading, reaching €60.18 with an intraday peak of €60.39. Despite this positive movement, the stock remains well below its 52-week high of €77.45 from April 2024, representing a gap of nearly 29 percent. The Stuttgart-based automaker faces ongoing challenges, as evidenced by its fourth-quarter 2024 results showing a 4.5 percent revenue decline to €38.45 billion and earnings per share dropping from €2.99 to €2.57 year-over-year. Analysts maintain an average price target of €66.80, suggesting significant upward potential. For fiscal year 2025, financial experts forecast earnings of approximately €8.79 per share, though dividend projections of €3.82 fall below the €4.30 distributed in 2024. The company benefits from strong international positioning, particularly in the U.S. market where it sold over 370,000 vehicles last year.

Potential Risks and Market Outlook

RBC recently raised its price target for Mercedes-Benz from €78 to €79, maintaining an "Outperform" rating despite market headwinds. While potential U.S. import tariffs and EU counter-tariffs could significantly impact profits, most investors don't anticipate such scenarios materializing. Recent changes to EU CO2 emission regulations have positively affected the industry. Management remains cautious about the Chinese market, though new products and driver assistance features could help limit market share losses. The company's upcoming first-quarter 2025 results, scheduled for release on April 30, are expected to provide fresh momentum for the stock price. Analysts see potential through cost reductions and product optimizations to increase margins to over 10 percent by 2027.