Mercedes-Benz Group AG

Mercedes-Benz Group's stock over the last five years has moved through a restructuring-driven rerating, a post-COVID and EV-optimism upswing, then a derating on tariffs, China competition and EV strategy resets, ending around €59.24 with a modest discount to analyst targets.

2021–2022: Spin-off, rebrand, EV pivot

In 2021, the group executed "Project Focus" to separate its trucks business (Daimler Truck) and concentrate on luxury cars and vans—a classic conglomerate-discount removal story that sharpened the equity narrative. The early 2022 rebrand from Daimler AG to Mercedes-Benz Group AG reinforced a pure-play luxury car identity that many investors saw as supportive for a higher multiple.

The July 2021 strategy update committed Mercedes-Benz to go "electric-only" where market conditions allow by decade's end, accelerating capital investment into EVs and software. This attracted "premium EV transition" sentiment, though some value-oriented investors worried about peak margins and execution risk.

From a technical perspective, 2021–2022 featured a sustained uptrend off pandemic lows, with the stock breaking above prior multi-year resistance and establishing the 5-year high zone near €90–€91.63 that still marks the upper bound of the recent range.

2023: Profit focus, value case

By 2023, management was clearly emphasizing profitable growth, cost discipline and premium mix rather than pure volume. The narrative shifted from "EV land grab" to "margin-focused luxury OEM," with improving free cash flow and strong dividends supporting a value case.

Investors increasingly framed the stock as a high-yield, low-P/E cyclical rather than a growth name, with debates centering on whether Chinese EV competition and regulatory costs would structurally pressure earnings or be offset by pricing power in top-end vehicles.

Trading through 2023 was characterized by a wide sideways range: the stock oscillated between the mid-€50s and low-€70s, repeatedly failing to sustain moves near prior highs and building a broad consolidation zone above the 5-year floor around €45.60.

2024: China, EV competition and derating

Through 2024, the group continued to generate strong revenues (over €140 billion) and high absolute profits, but investors grew more concerned about intensifying EV competition in China and ongoing regulatory and tariff headwinds, creating a valuation overhang despite solid financial metrics.

With the market assigning a single-digit to low double-digit forward P/E, the narrative shifted further toward "cheap cyclical/luxury value," with questions about whether the stock was a genuine opportunity or a value trap depending on Mercedes' ability to defend margins in EVs.

The chart showed multiple failed attempts to break back toward the €80–€90 zone, followed by pullbacks that respected multi-year support in the mid-€40s, keeping the name in a broad, volatile trading range rather than a clear trend.

2025: Tariffs shock, outlook withdrawal, efficiency push

In April 2025, Mercedes-Benz withdrew its 2025 earnings outlook due to uncertainty from new U.S. auto import tariffs, after reporting a roughly 41% drop in first-quarter earnings—a clear negative catalyst that reinforced concerns about geopolitical and regulatory risk.

By Q2 2025, however, the company reported "robust" half-year results: adjusted group EBIT of €2.0 billion in Q2 (down from €4.0 billion a year earlier), but industrial free cash flow improved to €1.9 billion in Q2 and €4.2 billion in the first half, alongside net liquidity of €30.8 billion and solid margins in Vans and Mobility. This supported the view of a resilient balance sheet and strong cash generation.

The 2025 investor narrative was torn between tariff- and China-driven earnings risk on one side and substantial cost savings, cash flow strength, high dividend yield and buyback activity on the other. Many analysts maintained an "outperform" or similar positive stance while acknowledging cyclical and policy headwinds.

Technically, the tariff shock and outlook withdrawal produced a sharp drawdown within the existing range, but the stock found support above the €45.60 multi-year low, then staged a recovery rally back toward the €60 area—an important retest and defense of long-term support.

Late 2025–February 2026: Strategy reset, consolidation around €59.24

By late 2025, commentators were discussing a "hard reset" of Mercedes' EV strategy toward a more balanced approach between internal combustion, hybrids and EVs through 2026, shifting the story from pure EV disruption back toward a pragmatic luxury OEM balancing profitability and regulatory requirements.

Early 2026 investor materials highlighted 2025 results broadly in line with updated expectations: roughly €132 billion in revenues and about €8.2 billion adjusted EBIT despite tariffs and FX headwinds, supported by more than €3.5 billion of cost savings. This reinforced the perception of Mercedes as a disciplined, cash-generative cyclical with self-help levers.

As of February 22, 2026, the share trades at €59.24 with a 1-year range of €45.60–€63.17 and a 5-year range of €45.60–€91.63. It carries an "outperform" average analyst rating, an average target price around €62.70, and indicated dividend yields in the mid-single digits—fitting a narrative of a solid but unfashionable value/cash-return story.

The last several months fit a consolidation phase: the stock is trading slightly below its 1-year high, above the recent lows in the mid-€50s, and well above the long-term support in the mid-€40s, with no recent breakout through the multi-year ceiling but also no breakdown of the long-term base.