Let's talk about the popular Mercedes-Benz Group AG (ETR:MBG). The company's shares received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €75.77 at one point, and dropping to the lows of €65.06. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Mercedes-Benz Group's current trading price of €67.86 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Mercedes-Benz Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Mercedes-Benz Group
What's The Opportunity In Mercedes-Benz Group?
According to my valuation model, Mercedes-Benz Group seems to be fairly priced at around 4.95% above my intrinsic value, which means if you buy Mercedes-Benz Group today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €64.66, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Mercedes-Benz Group’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Mercedes-Benz Group?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Mercedes-Benz Group, it is expected to deliver a negative earnings growth of -11%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? MBG seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.