Mercedes-Benz announces weak outlook, with the market environment still full of challenges

K-LinePoet · 2026-03-10T09:23:18+00:00

Mercedes-Benz reported weak performance amid challenging environmental conditions, with Q4 automotive profit margins below expectations due to pricing, exchange rates, and warranty impacts. The automotive division's adjusted earnings are expected to be about 30% below market expectations. Although the benefits of future transformation are not expected until 2027/28, a dividend yield of up to 10% remains attractive. Berenberg has lowered its target price to €60 and maintains a hold rating.

K-LinePoet

2026-03-10 09:23:18

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Berenberg analysts Romain Gourvil and Michael Filatov wrote that Mercedes-Benz reported weak results and outlook amid a still challenging environment. The company’s automotive profit margin in the fourth quarter was well below expectations, affected by weaker pricing, exchange rates, and unfavorable warranty costs. The company’s outlook implies that the adjusted EBIT for the automotive division will be about 30% below average expectations, impacted by an additional 100 basis points of margin pressure from tariffs and exchange rate-related factors. “2026 remains a year of transformation, with the combined effects of a high-end strategy, restructuring benefits, and repositioning of products/costs in China expected to materialize only from 2027/28.” Nevertheless, Berenberg acknowledged that a dividend yield of around 10% remains attractive. The bank lowered its target price for the stock from €63 to €60 and maintained a hold rating. Mercedes-Benz’s stock price fell 1% to €56.6.

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