Mercedes-Benz Trims Sales Outlook as China Drags, but Electrification and Mobility Margins Offer a Counterpoint
Published on 08/06/2026 at 16:22 | Redaktion boerse-global.de
The Stuttgart automaker has recalibrated its expectations for the year, acknowledging that the persistent weakness in China is now weighing more heavily on its car division than previously anticipated. Mercedes-Benz now guides for passenger car sales to come in "slightly below" the prior year's level, a downgrade from its earlier stance that volumes would hold steady. The revision, announced alongside second-quarter results on July 28, underscores how the world's largest auto market continues to complicate the company's near-term trajectory.
Investors took the news in stride, with the share price slipping 0.94% to €46.95 on Thursday, following Wednesday's close of €47.40. The stock remains down 22.13% year-to-date, a reflection of the China concerns that have dogged the equity for months. From its December peak, the shares are still trading roughly 23.92% lower.
A Mixed Quarter Beneath the Surface
The guidance change accompanied a quarterly report that offered something for both pessimists and optimists. Group revenue fell to €32.1 billion from €33.2 billion in the same period last year, a decline of 3.3%. Yet bottom-line results told a different story: net profit improved to €1.07 billion from €0.96 billion, a 16% gain. Earnings per share came in at €1.14, however, missing analyst consensus by 11%.
The brighter spots were concentrated in two areas. First, the electrified vehicle mix is advancing faster than planned. Mercedes lifted its xEV share target for 2026 to 23–25% of total sales, up from the previous 21–23% range — a signal that the transition to electric and hybrid powertrains is gaining momentum even as overall volumes soften. Second, the financial services arm is proving more resilient than expected. The company raised its return-on-equity forecast for Mercedes-Benz Mobility to 12–14%, a meaningful upgrade from the prior 10–12% band.
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Analysts Split on the China Risk, United on Upside
The post-earnings analyst response illustrated just how divergent views have become on the stock. JPMorgan set a price target of €70.00, while RBC Capital Markets was more conservative at €53.00. Deutsche Bank came in with the highest figure in the field at €73.00, a level well above the current trading price. At the other end of the spectrum, UBS held at €50.00 with a neutral stance, with Jefferies at €52.00 and both Bernstein Research and Berenberg Bank at €56.00.
Goldman Sachs' Christian Frenes, meanwhile, lifted his target from €65 to €67 while maintaining a "Buy" rating, citing higher estimates for the financial services division's operating result. Deutsche Bank's Tim Rokossa, following a meeting with management, also reaffirmed "Buy" with his €73 target, focusing on efficiency gains and the upcoming model offensive. Of the 14 analysts recently covering the stock, six recommend buying and eight say hold, with an average price target of €58.29 — a premium to the current share price that suggests the broader analyst community retains a constructive view despite the operational headwinds.
UBS stood out as the notable dissenter, pointing to the relatively modest size of the newly launched share buyback program as a reason for caution.
New Models, Recycling Deals, and a US Recall
Operationally, Mercedes is pressing ahead on multiple fronts. On July 29, the company unveiled the new GLA, a compact SUV arriving in November with three fully electric variants — the GLA 200, GLA 250+ and GLA 350 4MATIC — alongside a hybrid version. The push into the compact electric SUV segment is expected to provide further support for the xEV mix target.
The company also deepened its partnership with aluminum producer Hydro, announcing that "Hydro CIRCAL" — a material containing at least 75% post-consumer recycled content — will be used in series production of the next generation of electric vehicles, helping to reduce supply chain CO2 emissions. In a separate initiative, Mercedes presented an integrated charging solution with ChargePoint for commercial electric fleets in Germany and the UK, bundling hardware, software and support in a single offering.
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Not everything this week was forward-looking, however. Over the weekend, reports emerged that Mercedes-Benz USA is recalling roughly 310,000 vehicles from model years 2019 through 2026, spanning the A-Class, C-Class, CLA, GLA, GLB and GLC nameplates. The issue stems from faulty microswitches in door locks that can corrode and potentially impair the automatic parking function. While the recall adds to service costs, it is unlikely to fundamentally alter the company's operational trajectory.
What to Watch Next
The next major checkpoint arrives on October 28, when Mercedes publishes its third-quarter interim report. Between now and then, the central question remains whether Chinese demand stabilizes or whether the July guidance cut comes under further pressure. The competing signals — a softer core business, a rising electrification rate, and a majority of analysts leaning positive — suggest the stock may remain rangebound for the time being, with the improved profitability outlook for the mobility division offering at least one area of genuine strength beneath the surface.
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