Mercedes-Benz Earnings: Mixed Results in a Tough Environment, but Stock Remains Undervalued

Narrow-moat-rated Mercedes-Benz reported fourth-quarter earnings per share of EUR 2.99, EUR 0.34 better than the EUR 2.65 FactSet consensus but down EUR 0.73 from EUR 3.66 last year. Supply chain disruption (chips, logistics) kept consolidated volume relatively flat, down only 0.9% to 511,000 units from 515,000. Group revenue slipped 2% to EUR 40.3 billion from EUR 41.0 billion a year ago but beat consensus by 3%. Generally, pricing was favorable except for battery electric vehicle where competition has intensified. Mix was slightly unfavorable as entry product volume increased while top-end was flat and core declined slightly.