RBC Sees Downside Risk to Mercedes-Benz Group FY26 Margins Amid Ongoing China Pressures

05:27 AM EDT, 10/14/2026 (MT Newswires) -- RBC Capital Markets flagged persistent sales headwinds in China and downside risks to Mercedes-Benz Group's (MBG.F) full-year 2026 margins ahead of the German automaker's third-quarter results due Oct. 28. "China remains the dominant headwind, with Q3 deliveries down 31% y/y. Car margins are at risk of falling below the 3-5% full-year guidance range in Q3. That said, with Q3 consensus already below the full-year guidance range, incremental downside to shares may be limited. We do not anticipate a material benefit from the EU-China hybrid export cap given MBG's ongoing portfolio shift towards BEVs. We lower our PT to EUR44 from EUR54 on a more cautious China outlook and higher commodity/freight costs," analysts said Tuesday. While RBC noted that top-end vehicle sales were also "soft," down 21% year over year to 53,900 units, the research firm believes new product launches will support a sequential recovery in the fourth quarter. Amid their heightened caution in China, analysts reduced their full-year 2027 equity income estimate to 200 million euros from 300 million euros and compressed their EBITDA multiple for the same year to 1x from 1.5x. Revenue and adjusted EPS projections for 2026 and 2027 were also lowered. RBC rates the stock at outperform.