Daimler: A Luxury Brand On Sale
Shares of the no-moat automaker are about 15% undervalued relative to our forecast for cash flows and returns.
No-moat-rated
While we are encouraged by the improved year-over-year margin performance, we currently see no reason to raise our full-year forecast. First and second quarters are typically the seasonally strongest ones for automakers, with the third quarter being the seasonal low and a fourth quarter that can be seasonally volatile as manufacturers balance between holiday shutdowns and adjusting inventories for the year ahead.
However, we view the 4-star-rated shares of Daimler as undervalued relative to our forecast for cash flows and returns. The stock currently trades at more than a 15% discount to our fair value estimate.
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