After the spin-off, what is the next step for Daimler AG Stock? – Trefis
[Updated 12/29/2021] Daimler AG Update
Daimler AG shares (OTCMKTS: DDAIF) went from $ 97 in early December to $ 80 now. The decrease is mainly due to the split of the commercial vehicle business from Daimler and the subsequent listing of Daimler Truck Holding AG on December 10 on the Frankfurt Stock Exchange. Daimler AG will be renamed Mercedes-Benz Group AG from February 1, 2022 to focus on the future direction of cars and vans of the brands Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach and Mercedes-EQ.
All in all, we expect Turnover of Daimler AG to 125.5 billion euros (151.8 billion dollars) in 2021. In 2022, the turnover is expected to increase further to 128.9 billion euros (156 billion dollars) and its net profit is expected be 4 billion euros (4.9 billion dollars). This will bring EPS to € 3.78 ($ 4.57) for fiscal 2022, which, together with the P / E multiple of 19.9x and a Euro-dollar exchange rate of $ 1.21, will lead to at Daimler’s assessment about $ 91, which implies a 14% hike.
Below is our previous coverage of Daimler AG stocks where you can follow our view over time.
[Updated 09/14/2021] Daimler AG stock market rally to continue
Daimler’s actions (OTCMKTS: DDAIF) has gained 20% since late 2020, to currently $ 85. Inventory has risen since the start of the year as the business continues to recover from the pandemic. In the second quarter of 2021, which just ended, Daimler recorded revenue growth of 54% year-on-year to $ 52.4 billion, while profits were recorded at $ 4.05, compared with -2.11 dollars during the same period of the previous year. The share price edged down around June as the industry went through a semiconductor chip shortage, which affected production at all companies. At a recent Munich auto show, Daimler CEO Ola Kallenius mentioned that the third quarter is expected to be the hardest hit by the shortage before the recovery in the fourth quarter. We believe this has already been factored into the pricing and the company should continue to grow both revenue and profit in the future.
Overall, we forecast Daimler AG’s revenue to grow 4.6% to € 162.3 billion ($ 196 billion) in 2021. In 2022, revenue is expected to increase further to reach € 168 billion. euros (203 billion dollars) and its net profit is expected to be 5.6 billion euros. ($ 6.8 billion). This will bring EPS to € 5.24 ($ 6.34) for fiscal 2022, which, together with the P / E multiple of 15.7x and a euro / dollar exchange rate of $ 1.21, will lead to at a valuation of Daimler around $ 99, which implies a rise of 17%. .
[Updated 01/25/2022] Daimler AG share has upside potential of 10%
We believe this Daimler’s actions (OTCMKTS: DDAIF) is still up 10% once fear around the pandemic subsides. DDAIF is currently trading at around $ 72. He has recovered beyond his pre-Covid level. DDAIF stock is up 32% from the pre-Covid price of $ 54 seen in January 2020, after the Fed’s multibillion dollar stimulus package was announced on March 23, which boosted market sentiment. . The share price rose as lockdowns lifted across all regions, creating positivity for the industry. Despite the DDAIF stock rally since late March, we believe the stock has room for more growth as fear around the pandemic eases, with vaccines advancing across countries.
Coronavirus crisis 2020
Timeline of the 2020 crisis so far:
- 12/12/2019: Coronavirus cases first reported in China
- 01/31/2020: WHO declares global health emergency.
- 02/19/2020: Signs of effective containment in China and hopes of monetary easing from major central banks help S&P 500 reach record high
- 03/23/2020: S&P 500 34% drop of the maximum level observed on February 19, as cases of Covid-19 accelerate outside China. It doesn’t help that oil prices collapse in mid-March amid the Saudi-led price war
- From 03/24/2020: S&P 500 recovers 72% from lows on March 23, as the Fed’s multibillion-dollar stimulus package removes short-term survival anxiety and puts liquidity into the system.
On the other hand, here is how DDAIF and the market at large behaved during the crisis of 2007/2008.
Timeline of the 2007-08 crisis
- 10/01/2007: Approximate pre-crisis peak of the S&P 500 index
- 09/01/2008 – 10/01/2008: Accelerated decline in the market corresponding to Lehman’s bankruptcy filing (09/15/08)
- 03/01/2009: Approximate low point of the S&P 500 index
- 12/31/2009: Initial recovery to pre-accelerated decline levels (around 9/1/2008)
Performance of Daimler AG against S&P 500 during the 2007-08 financial crisis
DDAIF stock rose from levels of around $ 103 in September 2007 (pre-crisis peak) to levels of around $ 23 in March 2009 (as markets bottomed out), implying that DDAIF share has lost around 78% from its pre-crisis peak. It recovered from the 2008 crisis, to levels of around $ 53 in early 2010, increasing 136% between March 2009 and January 2010. In comparison, the S&P 500 index initially fell by 51%. % following the recession before recovering by 48% in January. 2010.
The fundamentals of Daimler AG in recent years
Turnover of Daimler AG increased 13%, from $ 169.6 billion in 2016 to $ 192 billion in 2019, mainly due to an increase in volume and prices. Despite the increase in revenues, the company’s margins fell from 5.6% to 1.4%, resulting in a 72% drop in EPS, from $ 8.82 in 2016 to $ 2.47 in 2019. The company’s third quarter 2020 revenue was 0.8% higher than a year ago, and EPS revenue for the quarter reached $ 2.26 from $ 1.75 for the same. period of the previous year.
Does Daimler AG have sufficient liquidity to meet its obligations during the coronavirus crisis?
Daimler AG’s total debt fell from $ 1.9 billion in 2017 to $ 20.6 billion at the end of the third quarter of 2020, while its total cash flow grew from $ 9.7 billion to $ 29.8 billion during the same period. The company earned $ 10 billion in cash from its operations in the first nine months of 2020. This shows that the company has enough cash to meet its obligations.
Phases of Covid-19 crisis:
- Beginning to mid-March 2020: Fear of the rapid spread of the coronavirus epidemic is reflected in reality, the number of cases accelerating in the world
- End of March 2020: social distancing measures + confinements
- April 2020: Fed stimulus suppresses short-term survival anxiety
- May-June 2020: Resumption of demand, with a gradual lifting of confinements – no more panic despite a regular increase in the number of cases
- Since end of 2020: Weak quarterly results, but continued improvement in demand and progress in vaccine development boost market sentiment
Based on the historical performance of the Daimler AG share, we believe that the share still has room for further growth in the near future.
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|Return of the S&P 500||4%||27%||114%|
|Trefis MS Portfolio Return||2%||47%||296%|
 Monthly cumulative and annual cumulative at 12/29/2021
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