Is Mercedes-Benz’s Share Buyback and LG Battery Deal Altering The Investment Case For Mercedes-Benz Group (XTRA:MBG)?

• In early December 2025, Mercedes-Benz Group AG disclosed that it had repurchased a total of 3,620,874 shares under its ongoing buyback program, while also announcing that LG Energy Solution will supply it with electric vehicle battery cells for seven years starting in 2028 under a new long-term agreement.
• By locking in a non-Chinese battery supply partnership with LG Energy Solution ahead of stricter US and EU rules, Mercedes-Benz is bolstering both its electric vehicle rollout plans and its efforts to reduce regulatory and supply-chain risk.
• Next, we’ll examine how this long-term LG Energy Solution battery deal could influence Mercedes-Benz’s investment narrative around electrification and resilience.

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Mercedes-Benz Group Investment Narrative Recap

To own Mercedes-Benz Group, you need to believe it can defend margins while shifting toward premium electrification and heavier software investment, despite softer demand and tariff headwinds. The latest share buyback and LG Energy Solution battery deal do not materially change the near term pressure from higher capex and R&D, or the sales risk in China, but they do speak to management’s focus on capital returns and supply security during a difficult earnings phase.

The long term LG Energy Solution partnership is most relevant here, as it ties directly into Mercedes-Benz’s electrification catalyst and efforts to secure non Chinese battery capacity ahead of tighter US and EU rules. By reinforcing battery supply for future EV models, this agreement sits alongside the broader plan for MB.EA based vehicles and connected services, which many investors see as central to the company’s path toward higher quality, more resilient earnings.

Yet behind these encouraging moves, investors still need to be aware of the mounting cost burden from electrification and MB.OS, especially if...

Read the full narrative on Mercedes-Benz Group (it's free!)

Mercedes-Benz Group's narrative projects €146.0 billion revenue and €8.5 billion earnings by 2028. This requires 1.6% yearly revenue growth and about a €1.7 billion earnings increase from €6.8 billion today.

Uncover how Mercedes-Benz Group's forecasts yield a €62.54 fair value, in line with its current price.

Exploring Other Perspectives

Eight Simply Wall St Community fair value estimates for Mercedes-Benz range from €53.42 to €77.74, underlining how far opinions can spread around a single stock. When you set these views against ongoing tariff risks that management already quantifies in the margin guidance, it becomes even more important to compare several perspectives before deciding what you think the business is really worth.

Explore 8 other fair value estimates on Mercedes-Benz Group - why the stock might be worth 13% less than the current price!

Build Your Own Mercedes-Benz Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Mercedes-Benz Group research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Mercedes-Benz Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Mercedes-Benz Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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