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Daimler: forecasts are being adjusted – plausible strategy

At Mercedes-Benz, car sales rose by 4 percent in the third quarter. China in particular provides the plus. BMW even achieved an increase of 10 percent in the core brand.

More important at Daimler, however, is currently the new strategy for Mercedes-Benz that was presented this week. Mercedes-Benz is to become more of a luxury brand. One wants to accelerate the development of electric drives and vehicle software. Fixed costs and capital investments are expected to decrease significantly in the coming years. The aim at Mercedes-Benz is to achieve an adjusted EBIT margin in the mid to high single-digit percentage range by 2025. In 2019 this was 5.8 percent.

The analysts at Independent Research rate the strategy update as plausible. However, the cost reduction is likely to meet with resistance and result in additional extra costs.

For 2020, the analysts are forecasting a loss per share of EUR 0.22 (old: EUR -0.50). In 2021 there should be earnings per share of 4.55 euros (old: 4.23 euros).

As before, there is a hold recommendation for Daimler shares. The price target increases from EUR 43.00 to EUR 49.00.

The shares of Daimler are quoted almost unchanged at 49.045 euros.

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