Daimler AG (NYSE:DAI), whose Mercedes-Benz brand enjoys a strong
presence in the luxury automotive segment in China, recently
reported a 56% year-on-year increase in sales in China in April.
During the same period, the Mercedes luxury offering, the S-Class,
registered a 111% year-on-year increase. Daimler markets its cars
globally under the brands Mercedes-Benz, Smart and Maybach and
competes with automakers like BMW (GR:BMW),
), Ford (
), Audi (
), Honda (NYSE:HMC), Toyota (NYSE:TM) and among
We have a price estimate of $63.20
for Daimler, which is around 10% below the current market
China the largest market for S-Class
The continued growth of the Chinese economy has enabled China to
emerge as the largest market for Daimler's luxury car, the S-Class.
The continued popularity of the S-Class drove sales growth of 111%
year-on-year in April. Daimler unveiled several new models at the
Auto Shanghai indicating its commitment to the Chinese market. A
wider range of product offerings will help Daimler compete
effectively with new luxury car launches in China by competitors,
such as BMW and Audi. China's expected growth will help Daimler
capitalize on its strong presence in the luxury market and continue
its rapid growth.
5% upside potential to stock price in our
In a scenario where its global sales of Daimler's luxury
vehicles - Maybach and SL vehicles - increases by 5% more than our
base case estimate every year and the average price of these
vehicles increases by 2% more than our base case estimates
annually, Daimler's implied stock price would be $66.40, or around
5-10% upside from our current stock price estimate.
You can test this scenario and others by dragging the trend line
in the interactive chart above.
complete analysis for Daimler AG stock is here