Mercedes-Benz Profitability Likely Impacted by China, Product-Mix Headwinds

Dow Jones10-09

1244 GMT - Mercedes-Benz could report a third-quarter adjusted cars EBIT margin below the company's full-year guidance range of 3%-5%, Deutsche Bank analyst Tim Rokossa writes. Car sales volumes declined 8% on year in the quarter, primarily driven by a 31% drop in China, while Europe and the U.S. delivered mid-single-digit growth, Rokossa says. The mix development was also unfavorable, with top-end vehicles down 21% on year compared with declines of 6% and 4% for the core and entry segments, respectively. "In addition to lower volumes and weaker mix, we expect profitability to be weighed down by higher raw material costs, increased depreciation and amortization, and elevated supplier-related expenses." The bank rates Mercedes-Benz stock at buy with a 70-euro target price. Shares rise 1.7% to 39.69 euros.

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment