Mercedes has reduced its full-year outlook because higher-than-expected input costs and a worsening sales environment in China are hurting its fourth-quarter results.
MBGAF is trading within a range we consider fairly valued.
Price
$44.42
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say
Bulls
2026 is a transition year for Mercedes. New product launches, including the all-electric C-class and GLC Long Wheelbase, should address portfolio gaps and support volume growth from 2027.
Bears
Pricing power in entry and core, which are 85% of volume, has come under pressure with the influx of new high-spec car brands that offer a greater value proposition. In a permanently more competitive market, pricing power is unlikely to fully recover.
Mercedes-Benz Group is a premium automotive original equipment manufacturer, selling around 2 million passenger cars, including its Chinese joint venture, and just under 400,000 vans per year. The company’s financial profile improved significantly following the spinoff of Daimler Truck in 2021. Unlike most automotive OEMs, Mercedes operates under its brand alone. In 2025, 15% of its passenger cars sold were top-end (G Class, Maybach, AMG, S Class), 58% were core (C and E Class), and 27% were entry-level cars (A and B Class). In volume terms, Asia and Europe are Mercedes’ largest markets, representing 41% and 36% of 2025 vehicle sales, respectively, followed by North America at 16%.