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UBS has downgraded Mercedes-Benz to "neutral" with a target price of €55, citing challenges in its core business and a tough outlook for 2025, including a projected 10-12% decline in earnings per share. In contrast, BMW has been upgraded to "buy" with a new target of €83, supported by strong cash returns and a favorable position regarding CO2 regulations, despite potential risks in the Chinese market.
UBS has downgraded Mercedes-Benz to "neutral" with a target price of €55, citing challenges in its core business and a tough outlook for 2025, including a projected 10-12% decline in earnings per share. In contrast, BMW has been upgraded to "buy" with a new target of €83, supported by strong cash returns and a favorable position regarding CO2 regulations, despite potential risks in the Chinese market.
UBS analyst Patrick Hummel has shifted his preference from Mercedes-Benz to BMW, citing improved cash flow and attractive yield prospects for BMW, which saw a 1.5% rise in share price. In contrast, Mercedes-Benz shares fell 1.2% following a downgrade by Barclays, which expressed concerns over the impact of electric vehicle investments and regulatory risks. Despite a recent recovery, both BMW and Mercedes-Benz remain significant underperformers in the DAX for 2024.
Mercedes-Benz Group AG, a leading global automaker, reported sales of 2.5 million vehicles in 2023, with passenger cars and commercial vehicles accounting for 83.2% of sales. The company also offers financial and mobility services, making up 16.8% of its revenue. Geographically, sales are distributed across Germany (16.8%), Europe (23.7%), the USA (23.5%), China (16.5%), and other regions.
UBS has downgraded Mercedes-Benz from "Buy" to "Neutral," reducing its price target from 72 to 55 euros. Analyst Patrick Hummel noted that while the company still presents an attractive dividend story, ongoing pressure on car margins is a concern. BMW has emerged as UBS's new top favorite.
Trump's tariff threats have unsettled Europe's auto industry, but Ferrari remains largely unaffected, as it produces exclusively in Italy and can pass on potential tariff costs to its affluent customers. Analysts believe that even significant tariffs would not deter demand for Ferrari's luxury vehicles, contrasting with the challenges faced by competitors like Porsche, which may struggle to absorb higher costs.
In 2025, car insurance type classes will change, affecting over 12 million vehicle owners in Germany. Approximately 5.1 million will benefit from lower premiums, while around 7.1 million may face higher costs. The German Insurance Association determines these classifications based on claims data, impacting liability and comprehensive coverage costs.
Xiaomi is set to launch its electric car, the SU7, which integrates seamlessly with its ecosystem of smart home products, allowing users to control devices like vacuums and air conditioners from the vehicle. The SU7 features a powerful triple-motor drivetrain and a user-friendly operating system compatible with both iOS and Android. Upcoming models include the MX11, an electric SUV, and a potential extended-range vehicle, reflecting Xiaomi's ambition to capture the young Chinese consumer market.
Innovators are advancing EV battery recycling and second-life applications, with companies like RecycLiCo and Green Science Alliance leading the charge. RecycLiCo's process transforms spent batteries into black mass, recovering valuable materials for new batteries, while GSA's breakthrough allows black mass to be used directly as cathode material, significantly reducing costs and environmental impact. As the demand for sustainable solutions grows, these developments promise to reshape the EV battery supply chain.
Two iconic classic cars will be auctioned in February to benefit the Indianapolis Motor Speedway Museum, with total sales expected to exceed $100 million. A 1954 Mercedes-Benz W196 R Streamliner, valued at $50 million, will be auctioned on Feb. 1 in Stuttgart, while a 1965 Ferrari 250 LM, estimated at $30 million, will be sold on Feb. 5 in Paris.
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