Investment opinion – BUY: Based on historic P/E valuation, we calculate a target price of EUR 81 for YE2016E, implying a 23% upside from the current share price. The new TP is 3.2% above our previous TP (of EUR 79) of February 2nd. The chart- technical outlook for Daimler shares is negative. (See pp.14-15.)
Category Archives: Daimler Mercedes
Daimler 4Q FY15E Preview
Investment opinion – BUY: Based on historic P/E valuation, we calculate a target
price of EUR 79 for YE2016E, implying a 23% upside from the current share price.
The new TP is 25% below our previous TP (of EUR 105) of October 23rd, reflecting
the collapse in the global equity markets seen since the beginning of the year. The
chart-technical outlook for Daimler share is negative.
Global Automotive Demand Atlas November 2015 edition
In October, global light vehicle sales increased 5.1% yoy to 7.62m, after 2.9% in September, resulting in a 1.5% increase to 73.26m YTD. LMC Automotive (LMCA) calculate that underlying demand continued to strengthen in October, with a SAAR (seasonally adjusted annualised rate) of 92.4m units/year, up 4.0% from 88.8m in September, resulting in a YTD SAAR of 88.2m, up less than 1% from FY14’s 87.4m. The recovery of the October SAAR to levels last seen in December (92.1m) and January (89.4m), is due to a strong recovery in China, supported by continuing strong performances in the US and Western Europe.
Daimler 2Q15E Preview
Daimler shares’ long-term positive trend is intact. Daimler shares are in a short- term correction. The short-term technicals are still negative with RSI and MACD both negative. Daimler shares have downside risk towards the 50-day moving average of around EUR 75 a share. We are advising to accumulate Daimler shares at current levels. Our medium- term price target for Daimler shares is EUR 110.
June 2015 Global Automotive Demand Atlas
In May, global light vehicle sales declined 1.4% yoy to 7.33m, after a 1.6% increase in April, resulting in a 1.1% increase to 36.79m YTD. LMC Automotive (LMCA) calculate that in May the SAAR (seasonally adjusted annualized rate) was 87.0m, units/year, down from 88.4m in April and well below January’s 89.4m, and 88.0m YTD.
The global LV sales that have been stable so far during 2015 are considerably weaker than a surprisingly strong December SAAR of 92.1m/year, confirming the suspicion that the latter was due to year-end marketing pushes in key markets.
For FY15E, we expect a global LV market of 89.0m, implying an increase by 1.7% or 1.5m. This is a downgrade from the previous forecast of 89.2m and an implied increase by 1.9% or 1.7m. The growth rate is thus expected to more than halve in 2015E, from 3.7% in FY14 and 4.0% in FY13.
Global Automotive Demand Atlas, May 2015 edition
For FY15E, we expect a global LV market of 89.2m, implying an increase by 1.9% or 1.7m. The growth rate is thus expected to almost halve in 2015E, from 3.7% in FY14 and 4.0% in FY13.
Daimler (EUR 88.00) – BUY
A strong 1Q15 bodes well for FY15E as Mercedes-Benz is set to grow EBIT and margin to EUR 7.99bn/9.6%. In 2015E-17E, we expect EPS to grow at a CAGR of 14.3% and reach EUR 9.70 in FY17E. Our YE15 new target price of EUR 103 implies a 17.5% upside potential for Daimler shares.
Morning Market Commentary & Weekly Charts
If the current slow GDP trend continues, and all signs we see point to this, then the level of earnings for the S&P 500 could be the lowest seen in two years. Q1. We are convinced by the initial data that this year’s Q2 will not be nearly as strong; we maintain our 2015 forecast for +2.2% GDP growth. It is time to make a few portfolio adjustments.
061114 – Global Automotive Demand – Emerging Markets
06 11 2014 CGI – GADA – Emerging Markets – June 2014
Auto Analyst Sabine Blumel reviews the outlook for automotive demand in the Emerging Markets.
0501 2014 – Daimler 1Q14 Results Commentary
05 01 2014 CGI – Daimler – 1Q14 results review
Automotive Analyst Sabine Blumel comments on Daimler 1q 2014 results: 1Q14A EBIT in line with 1Q14E: EUR 2.07bn for the group & EUR 1.18bn at M-B Cars. Some disappointment: at M-B Cars, a lower than expected 7.0% margin and at Trucks, lower than expected EBIT (EUR 0.35bn/4.9%) due to country-mix. We fine-tuned our FY14E EPS to a 19% increase to EUR 5.93. Our YE14 TP of EUR 82.00 implies a 24% upside potential for Daimler shares.
Morning Market Commentary – DAX, German surplus
We are expecting for the DAX 30 equities’ outperformance to extend through 2015. EPS expectations should stabilize alongside global GDP growth. We are forecasting DAX EPS FY 2014 to rise by 16% yoy to 760. (Vs. consensus 729).
In the past 30 years that we have been active in the global equities capital markets arena, Germany has been focusing like no other nation and its corporate sector in re-inventing and restructuring and repositioning itself and its economy by constantly upgrading through technological, intellectual value-added, and by high capital expenditure driven innovative research and development. This has lead to the point that the majority of German companies to-date are world class leaders, second to none.
Daimler 2Q13 Earnings, Models & Valuation
Daimler: A sharp improvement in 2Q13 results points towards strong earnings recovery in 2H13E & 2014E-15E.
Daimler (EUR 54.21) – BUY Target price: EUR 72.94; potential +35%
Previous target price: EUR 51.97 (April 16th).
Global Automotive Demand Atlas – April edition
In March, the global light vehicle markets declined 1.5% yoy to 7.96m units, after having declined 6.2% yoy in February, resulting in a 1.6% yoy increase in YTD, according to LMC Automotive. The SAAR (seasonally adjusted annualised rate) of sales was 81.26m units/year, 2.0% higher than February’s 79.68m and 5.4% down from a record 85.91m in January. YTD, the SAAR was 82.83m, 2.3% higher than FY12’s 81.00m. In FY13E, the global LVs markets are expected to grow 2.8% to 83.2m, which implies a considerable deceleration from last year’s 5.3% and is in line with our previous forecast. (See GADA March 2013 edition of April 1st, 2013.) From 2014 onwards, the markets are expected to accelerate again and to grow by almost 7% p.a. in 2014E and 2015E.
Daimler 1Q13 Valuation & Preview
Daimler (EUR 39.44) – BUY – Target price: EUR 51.97; potential +32%
At EUR 39.44, Daimler shares are currently valued at 7.2x prospective 2013E earnings and 6.7x prospective 2014E earnings; the latter is at a 36% discount to the 5-year average historic valuation of 10.5x and at a 25% discount to the 10-year low historic valuation of 8.9x. This is inconsistent with the implication that our estimates for 2014E EPS (EUR 5.91) are 44% above the 5-year average of EUR 4.11 and 63% above the 10-year average of EUR 3.62.
A valuation in line with the 10-year low historic valuation of 8.9x implies a share price of EUR 52.63 at year-end 2014E and time-discounted (yield of 10-year Bund) a target price of EUR 51.97 at year-end 2013E, which is 32% above the current share price and 15% below our previous target price of EUR 60.91 (February 11th). (See our latest company report ‘Daimler: 1Q13E preview’ of April 16th.)
Global Automotive Demand Atlas – February edition
In January, the global light vehicle markets grew 12.0% yoy, after having advanced 1.3% yoy in December and 5.2% to 80.89m in FY12, according to LMC Automotive. The SAAR (seasonally adjusted annualised rate) of sales hit a record level of 85.91m units/year in January, 4.4% higher than December’s 82.31m. In FY13E, the global LVs markets are expected to decelerate sharply and grow just 2.7% to 83.0m, in line with our previous forecast. (See GADA January 2013 edition of January 23rd, 2013.)
Daimler Valuation (EUR 45.45) – BUY
At EUR 45.45, Daimler shares are currently valued at 9.6x prospective 2013E earnings and 7.7x prospective 2014E earnings; the latter is at a 27% discount to the 5-year average historic valuation of 10.5x and at a 14% discount to the 10-year low historic valuation of 8.9x. This is inconsistent with the implication that our estimates for 2014E EPS (EUR 5.91) are 44% above the 5-year average of EUR 4.11 and 63% above the 10-year average of EUR 3.62.
A valuation in line with the 5-year average historic valuation of 10.5x implies a share price of EUR 61.90 at year-end 2014E and time-discounted (yield of 10-year Bund) a target price of EUR 60.91 at year-end 2013E, which is 34% above the current share price. (See our latest company report ‘Daimler: 4Q/FY12A operational results in line. 2013 set to be yet another ‘year of transition’ of February 11th.)
Daimler 4Q-FY12A results, FY13E-FY14E fine-tuned
Daimler shares – our view: At EUR 45.45, Daimler shares are currently valued at 9.6x prospective 2013E earnings and 7.7x prospective 2014E earnings; the latter is at a 27% discount to the 5-year average historic valuation of 10.5x and at a 14% discount to the 10-year low historic valuation of 8.9x. This is inconsistent with the implication that our estimates for 2014E EPS (EUR 5.91) are 44% above the 5-year average of EUR 4.11 and 63% above the 10-year average of EUR 3.62. (See pp. 24-25.)
Global Automotive Demand Atlas January 2013 edition
In December, the global light vehicle markets grew 1.3% yoy, after having advanced 4.3% in November, resulting in a 5.2% increase to 80.89m in FY12, according to LMC Automotive. The SAAR (seasonally adjusted annualised rate) of sales declined somewhat to 82.31m units/year in December, from 83.03m units/year in November, though was better than in October and September. In 2013E, the global LVs markets are expected to decelerate sharply and grow just 2.3% to 82.73m, in line with our previous forecast. (See GADA December 2012 edition of December 19th, 2012.) Continue reading
Global Automotive Valuations – September 2012 Edition
– Europe, US, Japan, Korea & India OEMs Valuations
– Global Truck Manufactures Valuations
Morning Market Commentary -Technical Market Observations
Technical Market Observations & Babbage
The weakest 3-week period of the year for North American equity markets is from September 16th to October 9th. The S&P 500 has dropped an average of 2.5% during this period. The TSE Composite Index has dropped an average of 4.0% per period. The weakness is related to negative guidance (earnings confession season) and analyst estimate reductions/downgrades during this period prior to release of third quarter results.
2012 so far:……
Global Automotive Demand Atlas – September 2012 edition
- US LV Sales
- Western Europe Car Market – Germany, France, Italy, Spain, UK
- Japan pc market
- China LV market
- Brazil pc market
- Russia LV market
- Demand trend for trucks – US, Europe, Japan
Daimler in the fast lane: 3Q10 results & FY10E-12E
Mercedes-Benz Cars keeps driving earnings upgrade FY10E-12E. Earnings upgrade for FY10E. Our view: At EUR 48.40, Daimler shares are currently valued at 7.9x prospective 2012E earnings, which is at a 32% discount to the 5-year (2004-08) low historic valuation of 11.7x and a 21% discount to the 10-year (1999-2008) low historic valuation of 10.0x. This is inconsistent with the implication that our estimates for 2012E EPS (EUR 6.12), which we do not expect to be peak earnings, are 60% above 2007’s pre- crisis EUR 3.83 and the 10-year average of EUR 3.84 and 98% above the 5-year average of EUR 3.08. (See pp. 24-25 for details.)
Daimler earnings recovery is gaining even more traction
Our view: At EUR 44.60, Daimler shares are currently valued at 7.4x prospective 2012E earnings, which is at a 37% discount to the 5-year (2004-08) low historic valuation of 11.7x and a 26% discount to the 10-year (1999-2008) low historic valuation of 10.0x. This is inconsistent with the implication that our estimates for 2012E EPS (EUR 6.04), which we do not expect to be peak earnings, are 57% above 2007’s pre- crisis EUR 3.83 and the 10-year average of EUR 3.84 and 96% above the 5-year average of EUR 3.08. (See pp. 25-26 for details.) Our indepth report…
Daimler Valuation
A valuation in line with the 10-year low historic valuation of 10.0x implies a share price of EUR 56.71 at year-end 2012E and time-discounted (yield of 10-year Bund) a target price of EUR 53.72 at year-end 2010E, which is 23.3% above the current share price. See our latest company report on Daimler of July 26th.
Daimler prel 1Q10 results & upgrade estimates and tables
Daimler’s preliminary 1Q10 results: stellar performance at M-B Cars and Daimler Trucks busting FY10 guidance. Management doubled their FY10 outlook for M-B Cars to EUR 2.5-3.0bn and trebled that for Trucks to EUR 0.5-0.7bn. We raised our EPS estimates by 64% to EUR 2.74 in FY10E and by 20% to EUR 3.75 in FY11E. (Final 1Q10 results are due Tuesday, April 27th.)
Daimler Earning Update 2010E-11E
Daimler’s 4Q/FY09 results: M-B Cars and Vans surprised on the upside. We confirm our view of an EPS recovery to EUR 1.67 in FY10E and EUR 3.38 in FY11E.
Daimler 4Q/FY09 provisional results comment & tables
Daimler 4Q/FY09 provisional results comment: Group EBIT slightly down qoq despite greater than expected margin improvement at M-B Cars and M-B Vans. Decision to pay no dividend for 2009 does not reflect on FY10 outlook and is actually shareholder friendly, according to management. M-B Cars generated a 4Q09 EBIT of EUR 608m and a 5.3% margin. Management guidance for FY10 is a group EBIT in excess of EUR 2.3bn driven by M-B cars and Trucks. Conservative assumptions regarding market developments, in particular at trucks, point towards the guidance being a floor, in our view.
Daimler 4Q/FY09E preview
We expect that Daimler which turned profitable again in 3Q09, will report further improvements in group profits at all levels in 4Q09E; a 18.5% qoq improvement in EBIT to EUR 557m/2.5% (from EUR 470m/2.4% in 3Q09), a 37% qoq increase in pre-tax profit to EUR 393m/1.8% and a net income of EUR 350m.
Daimler strong car sales in 4Q09 are just the beginning of an earnings recovery
The Daimler share price doubled from a LT low a year ago, to EUR 36.24 currently, valuing Daimler shares at 11.1x 2011E earnings, which is at a 31% discount to the 5-year average historic valuation. Our estimates imply that 2011E EPS (EUR 3.28) are 14.7% below 2007’s pre-crisis 2007’s EUR 3.83 and 6.2% above the 5-year average of EUR 3.08
Diamler 3Q09 final results
Our estimates imply that 2011E EPS (EUR 3.01) are 21.5% below 2007’s EUR 3.83, whereas the prospective multiple 2011E of 12.2x is 8% below the historic 2007 average valuation of 13.3x.
Albeit not cheap for a stock in a sector with many more troubles ahead, Daimler is in our opinion the best car stock in Europe, and we advise to add to positions at current prices, and particularly on a pullback in the markets…
Daimler – 2Q/1H09E preview & results tables and guidance
After an expected EUR 2.48 loss/share in FY09E, we expect Daimler to return to profit in 2010E (EUR 0.84 EPS): MBC’s return to profitability should not be affected by the expiry of incentive programmes and trucks should benefit from restructuring as demand stabilises at low level. At price revenue of 0.39x (2009E) Daimler shares are valued at a 20% discount to the average 10-year high (0.44x) and a 55% premium to the average 10-year low (0.25x). (See pp.5-7.)
Western Europe passenger car market– July 2009 update
Car market is set for an extended V-shaped recession. Our baseline scenario of an 11.7% correction to 11.68m in 2010 is based on the assumption that the schemes in Italy and France will be extended into part of 2010, the German scheme will expire at year-end as planned, and that car manufacturers will continue to aggressively discount.
Daimler 4Q08E preview & results table and guidance
Chrysler losses depress group EBIT and earnings. Mercedes-Benz Cars incurs 4Q08 loss from operations.