Mercedes-Benz: >10% Potential Yield Supports Bullish Case For Share Price Rebound

Cavenagh Research
9.44K Followers
(9min)

Summary

  • Mercedes-Benz Group AG has underperformed YTD due to Q1 earnings disappointment and uncertainty around potential tariffs; however, the company remains resilient and well-managed.
  • The impact of potential tariffs on China may be less severe than feared, with Mercedes-Benz considering increasing localization efforts to mitigate risks.
  • Looking ahead, the Company is expected to see a rebound in the second half of the year, with strong capital return programs pushing equity yield over 10%.
  • As a function of valuation anchored on a residual earnings model, I maintain my "Strong Buy" rating for MBGAF with a $147 per share target price.

A close-up of the new blackMercedes-Benz SLC

franz12

Mercedes-Benz Group AG (OTCPK:MBGAF) (OTCPK:MBGYY) has disappointed investors YTD, as Q1 under-performed expectations and uncertainty surrounding the impact of a potential tariff-war between the EU and China pressured investor sentiment. However, underneath the uncertainty and temporary weakness in earnings

This article was written by

9.44K Followers
Experience as an investment analyst for a major BB-Bank, as well as private equity consultant for MBB. Currently working towards the CFA charter, having completed I&II. Passion for risk-assets (Growth, Contrarian, Emerging Market) ex-colleague and close friend of Investor Express

Analyst’s Disclosure:I/we have a beneficial long position in the shares of MBGAF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Not financial advice

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About MBGAF Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on MBGAF

Related Stocks

SymbolLast Price% Chg
MBGAF
--
MBGYY
--