0957 GMT - Mercedes-Benz's car EBIT margins could fall below 3% this year while profitability might not recover as much as Citi had hoped next year, the bank says. However, much of this is discounted in the current share price, it adds. After the recent Volkswagen, BMW and Volvo Car profit warnings, it is clear that European autos continue to face severe earnings challenges in the second half of the year, Citi says. Key incremental pressures are coming from a combination of the continued deterioration in the Chinese market, much higher EU electric-vehicle penetration, global price competition, and higher raw materials costs, it says. The bank lowers its target price for Mercedes-Benz stock to 42 euros from 51 euros and keeps its neutral rating. Shares rise 0.5% to 40.42 euros.
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