Mercedes-Benz Group AG is one of the leading global suppliers of premium and luxury cars and vans. Mercedes-Benz Mobility AG offers financing, leasing, car subscription and car rental, fleet management, digital services for charging and payment, insurance brokerage, as well as innovative mobility services. The company’s focus is on innovative and green technologies as well as on safe and superior vehicles that captivate and inspire. The company’s goal is to go all-electric, where market conditions allow.
In 2022 the global automotive market was negatively impacted by the effects of the war in Ukraine, the covid-related lockdowns in China, the ongoing disruptions in global supply chains and semiconductor shortages. Globally, the automotive market was significantly lower in the second quarter in comparison to the same period of the prior year. Despite the challenges, Mercedes-Benz Group AG achieved strong Q2 financial result which was released on the 27th of July 2022, “thanks to sustained demand for luxury vehicles and premium vans, a good model mix, enhanced pricing power and ongoing cost discipline”.
In the wake of heightened geopolitical tensions in Eastern Europe, “Mercedes-Benz has sought to safeguard supply chains and to maximise the potential for reducing or substituting the use of natural gas in vehicle production” according to a company’s news release. “Mercedes-Benz sees a gas reduction potential of around 50% in Germany. The company’s long-term goal is to switch from gas to electricity and other renewable energy sources. The company continues to transform at full speed towards an all-electric future”.
On 11th of October 2022 Mercedes-Benz released its global Q3 (July to September) sales report. In Q3, Mercedes Benz sold 30,000 battery electric vehicles (5.8% from all vehicle sales), which represents an increase of 115% compared to the Q3 2021 and an increase of 28% compared to the Q2 2022. EV demand in the US is ramping up and Mercedes is introducing a full line-up, including the new EQS SUV which premier is later this month. Despite the challenging business environment for the industry, Mercedes appears to be faring better than most of its peers.
Electric vehicle sales were stronger than any other segment in Q3, helping the overall vehicle deliveries to reach 517,800 units (up 21% from Q2). This result shows Q3 is the strongest quarter this year, thanks to continuing demand for luxury EVs. The group has reached the sales numbers of its direct competitor BMW for Q3 (517,689 vehicles sold). As with BMW and other car makers, production and sales continue to be affected by semiconductor shortages and disrupted supply chains. Otherwise, the sales results could have been better, as demand outweighs production.
Parallel to the passenger car division, the Group’s sister company Mercedes-Benz Vans delivered an additional 3,300 electric vehicles in Q3. The company expects electric car sales to grow further, as new models would be introduced. The Mercedes-Benz EQE would be next plus configurations of existing models are on the pipeline.
The shares of Mercedes-Benz Group AG have been trading in a very strong up trend since March 2020, rallying from a low of €17.45 to a high of €77.90 reached in February 2022. A large bearish divergence between the price and the RSI indicator has formed on the weekly chart throughout April 2021 and February 2022, showing that internal momentum conditions have deteriorated. A large head and shoulders pattern has formed on the weekly chart, showing that selling pressure is building up.
The neckline of the pattern has been broken recently and thus providing the required confirmation. The pattern has bearish implications and points to lower prices over the medium-term. The first potential downside price target based on the technical breakout is €45.00 followed by €40.00 in the coming months.
The fundamental backdrop aligns with the technical picture. Amid challenging and uncertain times not just for the auto industry but the overall global economy, demand for vehicles is likely to weaken, while input costs are likely to remain elevated; therefore, corporate earnings could come under pressure in the near-term. Central banks around the world are raising interest rates aiming to combat persistently hot inflation (German CPI for September YoY climbed to 10%, while U.S. CPI for September YoY is at 8.2%), even at the risk of tipping the global economy into a recession. The global economy is slowing down and the inflationary pressures are likely to remain higher for longer, making the market environment unfavourable.
For magnified exposure to the stock, you can check our 3x Long and 3x Short Mercedes Benz ETPs to take advantage of future up and down swings in the share price.
Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.
Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.
Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.
Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.
Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.
È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.
Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.