Results: Mercedes-Benz Group AG Exceeded Expectations And The Consensus Has Updated Its Estimates
Mercedes-Benz Group AG (ETR:MBG) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a credible result overall - although revenues of €31b were what the analysts expected, Mercedes-Benz Group surprised by delivering a (statutory) profit of €1.64 per share, an impressive 25% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Mercedes-Benz Group's 18 analysts are now forecasting revenues of €131.8b in 2027. This would be a modest 2.9% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be €5.92, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of €132.4b and earnings per share (EPS) of €6.37 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Check out our latest analysis for Mercedes-Benz Group
It might be a surprise to learn that the consensus price target was broadly unchanged at €51.16, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Mercedes-Benz Group at €73.80 per share, while the most bearish prices it at €32.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Mercedes-Benz Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.3% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 1.4% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 2.6% per year. So it looks like Mercedes-Benz Group is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Mercedes-Benz Group. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at €51.16, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Mercedes-Benz Group analysts - going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Mercedes-Benz Group (1 is potentially serious!) that you should be aware of.
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