Mercedes-Benz Shares Hit Fresh 52-Week Low Even as Jefferies Upgrades on Cash-Flow Appeal
01.07.2026 - 01:11:01 | boerse-global.de
The contrast could hardly be starker. On the same day Mercedes-Benz shares plumbed a new 52-week trough of €42.64, Jefferies moved against the grain, upgrading the stock to "Buy" from "Hold." The broker’s analyst Philippe Houchois sees the selloff as overdone, arguing that the stock’s recent slide merely followed BMW’s profit warning and that Mercedes-Benz’s own full-year guidance remains credible. Yet even Houchois trimmed his price target from €60 to €52, cutting free-cash-flow estimates for 2026 through 2028 by 6%. At current levels, he calculates an 11.6% free-cash-flow yield—a metric the firm is betting on rather than pinning hopes on a rapid margin recovery.
That cash-flow story is backed by first-quarter numbers. Revenue in Q1 2026 reached €31.6 billion, while free cash flow from the industrial business came in at €1.86 billion. Net industrial liquidity stood at €33.8 billion. A buyback launched last November was completed on June 1, 2026, mopping up roughly 37.6 million shares for €2 billion. The balance sheet strength, Jefferies argues, supports capital returns via organic cash generation and divestments, even if the earnings engine is sputtering.
Sputter is an understatement. Net profit in full-year 2025 halved to €5.3 billion, and the trend continued into the first quarter of 2026: group profit fell 17.2% to €1.43 billion, while EBIT dropped nearly 17% to €1.90 billion. A key drag is Germany’s cost base. Production hours there cost €45 on average in 2025, 29% above the EU average, while German unit labour costs in 2024 were 22% higher than the mean of 27 comparable countries. Management has responded by deferring a planned special bonus for staff—a move that signals the depth of the squeeze.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
The squeeze is also shaping strategy. Mercedes-Benz is rowing back from its pure-electric pivot, reintroducing powerful V8 engines for the luxury segment, aided by relaxed emissions rules. The shift is pragmatic: shore up profitability while demand for high-end EVs remains tepid. In the nearer term, Jefferies forecasts a second-quarter margin of 3.2% in cars and 8.8% in vans, with full-year figures of 3.7% and 8.9% respectively. That compares with the 4.1% adjusted car margin posted in Q1, which was itself within the 3–5% annual guidance band.
On the charts, the damage is severe. The stock changed hands at €43.96 on the day of the upgrade, barely 3% above the €42.64 low. The year-to-date decline is nearly 29%, and the gap to the 200-day moving average of €54.95 stands at 20%. The relative strength index of 34.2 hovers near the oversold threshold of 30—capable of luring dip-buyers, but no guarantee of a durable bounce. The 30-day annualised volatility of 29.1% underscores the market’s frayed nerves.
For the Jefferies call to pay off, Mercedes-Benz must hold its margin corridor through the rest of 2026. The second-quarter report will be the first real test. Until then, the stock remains caught between a depressed share price and an analyst’s conviction that cash flow—not margin fantasy—offers the safer bet.
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