Daimler Truck stocks falls, weighed by weak performance at Mercedes-Benz
Investing.com - Daimler Truck (ETR:DTGGe) stock fell Wednesday after the German truck maker pre-released its second-quarter results, registering a weak performance at its Mercedes Benz (ETR:MBGn) division as well as its Chinese joint venture suffering an impairment.
At 08:30 ET (12:30 GMT), Daimler Truck stock fell 2.6% to €36.84, but was still up just over 8% so far this year.
Daimler Truck released its second-quarter results early Wednesday, results with industrial adjusted EBIT of €1,156m, around 4.5% below consensus expectations.
There were significant beats at Daimler Trucks North America (DTNA) and Buses, while adjusted EBIT at Mercedes-Benz (OTC:MBGAF) came in around 26% below consensus and adjusted EBIT at Trucks Asia negative following an approximate €120 million impairment of the China joint venture.
Analysts at Stifel noted that the German company has put its full-year guidance under review.
“We think it will need to reduce its outlook for both unit sales and margin at Mercedes-Benz while we see earnings upgrade potential at DTNA and buses after 1H24,” the investment bank said, in a note. “Overall, our back-of-the-envelope calculation suggests that industrial adjusted EBIT consensus could fall by c6.5%.”
Stifel suspects the margin deterioration in the second quarter at Mercedes-Benz “was particularly driven by even weaker than expected demand in core European markets (in particular Germany).”
Stifel maintained a ‘buy’ rating on Daimler Truck, with a €58 price target.
Jefferies also kept a ‘buy’ rating, but cut its price target to €52 from €56.
“The positive is that pricing remains firm, however it begs the question of what drove the MB miss/Nth Am beat. Downgrades to guidance are rarely in the numbers and our FY24 EBIT falls to -2% vs pre disclosure consensus,” analysts at Jefferies said, in a note.
That said, over the longer view, Jefferies takes a positive view.
“As the world's largest and now independently listed truck OEM, DT is determined to deliver industry-leading profitability to match its scale and market positions,” the U.S. investment bank said.
“We see signs of improving end markets and expect that as evidence of this becomes clearer the stock will re-rate.”
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