Mercedes-Benz (XTRA:MBG) Valuation After New Buyback, Premium Strategy Update and 2025 Guidance Reaffirmation
Mercedes-Benz Group (XTRA:MBG) just paired a new €2 billion share buyback with a dividend yield above 7%, signalling management is willing to reward shareholders even as 2025 earnings are expected to soften.
See our latest analysis for Mercedes-Benz Group.
The new buyback comes after a solid run, with a roughly 17% 3 month share price return and a 24% 1 year total shareholder return, suggesting investors see the capital return story as strengthening rather than fading.
If this mix of income and re rating potential appeals, you might also want to explore other auto names using our dedicated screener for auto manufacturers.
With the stock up strongly and trading only slightly below analyst targets, yet still at a notable discount to some intrinsic estimates, is Mercedes Benz now a mispriced value with upside, or are markets already factoring in its next stage of growth?
Most Popular Narrative Narrative: 10% Undervalued
With Mercedes-Benz Group closing at €61.52 against a narrative fair value of €61.55, the story hinges less on the headline gap and more on the assumptions powering that price.
The upcoming launch of over 25 new models including core segment EVs built on the advanced, flexible Mercedes-Benz Electric Architecture (MB.EA) positions Mercedes-Benz to capitalize on the global shift toward electric vehicles and premium electrification, supporting future revenue growth and higher average selling prices.
Strategic emphasis on proprietary digital platforms, notably the MB.OS operating system, will enable Mercedes-Benz to generate high-margin, recurring revenue through over-the-air updates and connected services, driving long-term improvement in operating margins and earnings.
Want to see how a legacy automaker earns a valuation more often reserved for fast growing platforms, not factories? The narrative quietly rewires revenue mix, margins and future profit multiples around software, electrification and a surprisingly ambitious earnings curve. Curious how those moving parts add up to this fair value, and what has to go right for it to hold?
Result: Fair Value of $61.55 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, softer China demand and rising trade tensions could quickly erode margins, challenging the premium software-plus-EV narrative now embedded in expectations.
Find out about the key risks to this Mercedes-Benz Group narrative.
Build Your Own Mercedes-Benz Group Narrative
If you see the story differently or simply prefer to dig into the numbers yourself, you can build a complete narrative in under three minutes: Do it your way.
A great starting point for your Mercedes-Benz Group research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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