Daimler profit warning sends vehicle shares skidding

Lloyd Doyle
June 24, 2018

The brokerage now has a "buy" rating on the stock. equinet's target price would indicate a potential upside of 32.34% from the company's previous close.

Daimler (ETR:DAI) received a €73.00 ($84.88) price objective from investment analysts at Kepler Capital Markets in a report released on Thursday.

A study in April by asset managers AllianceBernstein showed that German carmakers with big U.S. operations, such as Daimler, would be worse hit by proposed Chinese import tariffs than USA auto firms. Deutsche Bank set a €90.00 ($104.65) price objective on shares of Daimler and gave the company a "buy" rating in a research note on Wednesday, February 14th.

The company projects annual EBIT at Mercedes-Benz Vans division to be significantly below the previous year's level, and at Daimler Buses division to be in the magnitude of the previous year.

Shares of DAI stock traded down €0.45 ($0.52) on Monday, hitting €60.45 ($70.29). Four equities research analysts have rated the stock with a sell rating, thirteen have given a hold rating and seven have issued a buy rating to the company's stock. The company now has a consensus rating of "Hold" and an average target price of €74.26 ($86.35).

In an official statement, Daimler said it will sell fewer than expected SUVs and at the same time it would have higher than expected costs.

Earlier in June, Daimler was forced to recall vehicles in Germany that had been fitted with illegal software used to mask diesel emissions.

As a result, Daimler said it now predicts that its underlying or operating profit, as measured by earnings before interest and tax, will be slightly lower than previous year, instead of slightly more, as it previously expected.

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