HSBC raises Mercedes-Benz shares target on strong liquidity

EditorEmilio Ghigini
Published 07/05/2024, 11:32
© Reuters.

On Tuesday, HSBC increased its price target for Mercedes-Benz (OTC:MBGAF) Group (MBG:GR) (OTC: DDAIF)shares, setting it at €87, up from the previous €85. The firm continues to recommend a Buy rating for the automaker. The adjustment reflects Mercedes-Benz's strong performance, particularly in the premium segment of the market.

The financial institution explained that Mercedes-Benz warrants a 15% premium over its competitor BMW (ETR:BMWG) (BMW:GR), which has a Hold rating and a target price of €103.05.

This premium is attributed to Mercedes-Benz's focus on the higher end of the market and its leading position in terms of pricing. These factors contribute to the company's higher revenues per unit and profit margins.

HSBC's new target price for Mercedes-Benz is based on the company's first-quarter net industrial liquidity, which surpassed expectations. This positive financial result has compensated for minor reductions in the firm's estimates. The updated price target suggests a potential upside of approximately 22%.

The analysis acknowledges potential risks, particularly regarding the pricing of Battery Electric Vehicles (BEVs) and the market's reception to upcoming BEV models. These factors are considered key downside risks for Mercedes-Benz's stock performance in the future.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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