Mercedes-Benz (MBG.DE) is set to report its Q4 2024 earnings on Thursday, February 20. Its Q4 performance will provide crucial insights into the business’ continuous development and the success of its most recent initiatives.
Analysts expect the automobile giant to report strong numbers. Here’s everything you need to know if you’re trading Mercedes Q4 earnings.
Source: TradingView
What’s in Focus?
Analysts anticipate that Mercedes-Benz might report better than its previous earnings by exceeding previous numbers of its passenger car division, which might indicate stronger demand for high-end cars. The focus will also be on cost reduction strategies, production efficiency, and pricing adjustments despite ongoing uncertainty with global supply chains.
The automobile giant’s performance in China is essential, as slowing demand and rising competition from domestic electric vehicle companies have impacted its stock price.
Mercedes-Benz’s shift to electric vehicles and its ability to compete with Chinese competitors will be monitored closely. Macroeconomic factors like interest rates and consumer demand in Europe and the US could also impact earnings. ⁽¹⁾
The earnings report will provide insights into how Mercedes-Benz plans to face these challenges while maintaining market dominance. Investors will look for indicators of financial stability, strategic adjustments, and the company’s outlook in an increasingly competitive and shifting global market.
Key Focus Areas for Mercedes-Benz’s Q4 Earnings
- Electric Vehicle Strategy
Investors will monitor updates related to Mercedes-Benz’s EV strategy. Their EV lineup, which includes new model launches and more innovation in battery technology, will be important to determine the company’s position in the EV industry.
- Supply Chain Management
Given the ongoing challenges in global supply chains, particularly regarding semiconductor shortages, insights into how Mercedes-Benz manages these issues will be in the spotlight. Any insights about production capacity and supply chain stabilization can impact investor sentiment.
- Profitability and Cost Management
Investors will look to determine the company’s strategies for reducing costs while maintaining profitability. Markets will be looking at the steps taken to improve margins, especially with rising commodity prices and inflationary pressures.
- Luxury vs. Mass Market Segments
The performance of Mercedes-Benz within the luxury vehicle segment, as compared to potential growth opportunities in the mass market, could inform future strategic decisions. Observing how the brand navigates these segments while maintaining its luxury status will be important to consider moving forward.
- Geographical Performance
Differentiated performance across various geographical markets, including growth in emerging markets versus established regions, could point towards overall business health.
- Strategic Partnerships and Technological Advancements
Any announcements regarding partnerships in technology, especially related to automation and sustainability, would be critical. These collaborations can enhance Mercedes-Benz’s innovation capabilities and market positioning.
Market Expectations
Market Estimates:
- Earnings per Share (EPS): €2.40
- Revenue: €37.9 bn
Mercedes-Benz has been impacted by a slowdown in China, which may impact its profits. This factor led the company to cut its future outlook for 2025. Mercedes-Benz has cut its return on sales forecast from 11% to between 7.5% and 8.5%. ⁽²⁾
China has imposed an additional tariff on US-made vehicles with larger engines, affecting brands like Mercedes-Benz more than some competitors. Analysts predict this could slightly reduce the company’s earnings, adding pressure to its financial performance. The tariff increase highlights the growing trade tensions between China and the US, which could have broader implications for the luxury car market. ⁽³⁾
Meanwhile, Mercedes-Benz has joined Geely in challenging EU tariffs on Chinese-made electric vehicles, which are expected to remain in place for several years. As the company produces Smart cars in China through a joint venture, these tariffs could impact regional sales and profitability. German manufacturers are particularly concerned about the long-term effects on their business in China, one of their key markets. ⁽⁴⁾
Mercedes-Benz and other major European automakers have urged the European Commission to negotiate a “grand bargain” with the new US administration to reduce trade risks. The fear of escalating trade wars, especially with the US imposing higher tariffs on Mexican and Canadian imports, could significantly impact earnings for major automakers, including Mercedes-Benz. ⁽⁵⁾
In related news, Citi analyst Harald Hendrikse recently updated the financial outlook for Mercedes-Benz Group, raising the price target to €60 from €56. ⁽⁶⁾
Kintaro Ueno, Managing Director of Mercedes-Benz Japan, reported that EV sales are doubling yearly. Mercedes-Benz Group finished 2024 with a solid Q4, achieving 2.4 million annual sales. The company also received approval for 95 km/h Level 3 autonomous driving in Germany. ⁽⁷⁾
