Mercedes-Benz Margin and Cash Flow Are Now Key Concerns -- Market Talk

Dow Jones10-03

0944 GMT - Mercedes-Benz recently cut its 2024 guidance on further macro and China weakness, and the key concerns now revolve around where future margins will settle and the implied sustainable level of free cash flow in its automotive unit, Barclays analysts write. Mercedes-Benz now expects a second half Ebit margin of 6% in its cars unit, down from an implied 11.5%, and Barclays says the magnitude and speed of the deterioration from the company's assessment at the first half stage is surprising. "What's the new normal? CFO says not to extrapolate at 6% underlying margin - but 10% appears out of reach for 2025/2026." Barclays downgrades the stock to equal weight from overweight and lowers its price target to 65 euros from 76.50 euros. (dominic.chopping@wsj.com)

(END) Dow Jones Newswires

October 03, 2024 05:44 ET (09:44 GMT)

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Mercedes-Benz now expects a second half Ebit margin of 6% in its cars unit, down from an implied 11.5%, and Barclays says the magnitude and speed of the deterioration from the company's assessment at the first half stage is surprising. \"What's the new normal? CFO says not to extrapolate at 6% underlying margin - but 10% appears out of reach for 2025/2026.\" Barclays downgrades the stock to equal weight from overweight and lowers its price target to 65 euros from 76.50 euros. 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Mercedes-Benz now expects a second half Ebit margin of 6% in its cars unit, down from an implied 11.5%, and Barclays says the magnitude and speed of the deterioration from the company's assessment at the first half stage is surprising. \"What's the new normal?CFO says not to extrapolate at 6% underlying margin - but 10% appears out of reach for 2025/2026.\" Barclays downgrades the stock to equal weight from overweight and lowers its price target to 65 euros from 76.50 euros. 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