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    Assessing Mercedes-Benz (XTRA:MBG) Valuation After China Sales Slump and Intensifying Local EV Competition

    Simply Wall St·12/15/2025 02:19:38
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    Mercedes-Benz Group (XTRA:MBG) is back in focus after reporting a steep 27% year on year sales drop in China for the July to September quarter, underscoring how quickly local competitors are reshaping the luxury car market.

    See our latest analysis for Mercedes-Benz Group.

    Despite the setback in China, investors have largely taken it in stride, with the share price at $61.69 and a roughly 20% 3 month share price return pointing to still constructive sentiment. Over the longer run, the about 75% 5 year total shareholder return suggests that, for now, the market sees Mercedes-Benz as a resilient cash generator rather than a broken growth story.

    If this shift in the auto landscape has you rethinking your watchlist, it could be a good moment to discover other established and emerging auto manufacturers that might benefit from changing demand patterns.

    With growth wobbling in China yet long term returns still robust, is Mercedes-Benz quietly trading below its intrinsic value, or has the recent rally already baked in the next leg of the company’s earnings power?

    Most Popular Narrative Narrative: 1.4% Undervalued

    With Mercedes-Benz Group last closing at €61.69 against a narrative fair value near €62.54, the current pricing leaves almost no obvious gap, which sharpens attention on what is driving that slim upside case.

    The analysts have a consensus price target of €60.081 for Mercedes-Benz Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €83.0, and the most bearish reporting a price target of just €40.0.

    Read the complete narrative.

    Curious how modest growth assumptions and a richer future earnings multiple can still argue for upside in a mature automaker? The narrative leans on evolving margins, disciplined discounting and a valuation bridge that may surprise anyone who has written off premium carmakers as ex growth stories. Want to see exactly which earnings profile and profitability path are being used to justify that future price tag?

    Result: Fair Value of $62.54 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, persistent China softness and higher for longer tariff or trade friction could quickly erode the slim upside implied by today’s valuation narrative.

    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 want to dig into the numbers yourself, you can build a personalised view in just a few 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.

    Looking for more investment ideas?

    Before Mercedes-Benz makes its next big move, consider broadening your edge by scanning focused stock ideas that many investors may still overlook using the Simply Wall Street Screener.

    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.