In a report released today, Daniel Schwarz from Stifel Nicolaus maintained a Hold rating on Mercedes-Benz Group (MBGAF – Research Report), with a price target of €64.00.
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Daniel Schwarz has given his Hold rating due to a combination of factors including Mercedes-Benz Group’s mixed financial outlook and performance metrics. The company’s EBIT margin for cars was slightly below consensus expectations, although when adjusted for restructuring costs, it was slightly above expectations. Additionally, while the company reported a solid free cash flow for the quarter, the outlook for future free cash flow is significantly lower than the previous year due to increased spending on property, plant, and equipment, as well as research and development.
Despite a strong year-to-date performance, the lack of positive surprises in the recent financial outcomes and a weaker forward-looking outlook contributed to the Hold rating. The company is guiding for a decline in group EBIT and free cash flow, with revenue slightly below the prior-year level. These financial projections suggest caution, as the anticipated drop in EBIT is more than 15%, indicating potential challenges ahead. Such factors underpin the Hold rating, suggesting that investors may need to wait for clearer signs of improvement before expecting substantial gains.
In another report released today, Jefferies also maintained a Hold rating on the stock with a €60.00 price target.