Stock Analysis & Valuation Mercedes-Benz Group AG (DAI.DE)

• Previous Close: €70.16
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	97.94	40
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Mercedes-Benz Group AG (formerly Daimler AG) is a leading global automotive manufacturer headquartered in Germany, specializing in premium and luxury vehicles, commercial trucks, vans, and buses. The company operates through three key segments: Mercedes-Benz Cars & Vans, Daimler Trucks and Buses, and Daimler Mobility. Known for its iconic Mercedes-Benz brand, the company also produces high-performance vehicles under Mercedes-AMG and ultra-luxury models under Mercedes-Maybach, while expanding its electric vehicle lineup with the Mercedes-EQ series. Additionally, Mercedes-Benz offers financial services, leasing, and fleet management through its Daimler Mobility segment. With a strong presence in Europe, North America, and Asia, the company continues to innovate in autonomous driving, connectivity, and sustainable mobility solutions. As a key player in the Consumer Cyclical sector, Mercedes-Benz remains a dominant force in the premium automotive market, balancing tradition with cutting-edge technology.

Investment Summary

Mercedes-Benz Group AG presents a compelling investment case due to its strong brand equity, diversified revenue streams, and leadership in premium automotive segments. The company reported robust FY 2021 financials, including €133.9 billion in revenue and €11.05 billion in net income, supported by strong demand for luxury vehicles and commercial trucks. However, investors should consider risks such as high total debt (€112.25 billion), exposure to cyclical auto demand, and intense competition in electric vehicles (EVs). The company’s beta of 1.47 indicates higher volatility compared to the broader market. Dividend investors may find the €73.08 per share payout attractive, but long-term growth depends on successful EV adoption and cost management amid rising R&D expenses.

Competitive Analysis

Mercedes-Benz Group AG maintains a competitive edge through its strong brand recognition, technological innovation, and diversified product portfolio. In the luxury car segment, it competes directly with BMW and Audi, leveraging superior craftsmanship and advanced features like MBUX infotainment. The company’s early investments in EVs (via Mercedes-EQ) position it well against Tesla, though Tesla’s software and charging network remain superior. In commercial vehicles, Daimler Trucks and Buses holds a leading position, particularly in Europe and North America, competing with Volvo and PACCAR. Daimler Mobility provides an additional revenue stream, rivaling captive finance arms of other automakers. However, Mercedes-Benz faces challenges from new EV entrants (e.g., Lucid, Rivian) and must balance legacy combustion-engine profitability with costly EV transitions. Its global manufacturing footprint and strong after-sales service network remain key advantages.

Major Competitors

• Bayerische Motoren Werke AG (BMW) (BMW.DE): BMW is a direct rival in premium vehicles, with strong brand loyalty and a growing EV lineup (iX, i4). It outperforms Mercedes in some markets (e.g., China) but lags in commercial vehicles. BMW’s financial services division is similarly robust.
• Volkswagen AG (VOW3.DE): VW’s Audi and Porsche brands compete with Mercedes in luxury, while its scale in mass-market EVs (ID. series) poses a threat. VW has deeper pockets for R&D but struggles with software delays and legacy cost structures.
• Tesla, Inc. (TSLA): Tesla dominates the EV market with superior battery tech and software. Mercedes’ EQ models trail in range and charging infrastructure, but its luxury appeal and dealer network remain strengths.
• Volvo AB (VOLV-B.ST): Volvo is a key competitor in trucks and buses, with strong electrification efforts (e.g., Volvo FL Electric). It leads in safety innovations but lacks Mercedes’ luxury car segment diversification.
• Porsche Automobil Holding SE (PAH3.DE): Porsche competes in high-performance luxury, with superior margins but a narrower model range. Its Taycan EV outsells Mercedes’ AMG EVs, though Mercedes has broader market reach.