Mercedes-Benz Faces Twin Pressures as Analyst Cuts Meet Union Standoff
Published on 10/09/2026 at 14:12 | Editorial boerse-global.de
Two brokerage downgrades landed on the same day that Mercedes-Benz's works council chief signalled a willingness to negotiate, leaving investors to weigh whether the Stuttgart automaker is nearing a floor or bracing for a prolonged tug-of-war.
Targets Trimmed From Two Directions
UBS lowered its price objective to EUR 45 from EUR 50 while keeping a neutral rating, and Exane BNP Paribas cut its target to EUR 38.60 from EUR 46 with an "underperform" recommendation. The double reduction arrived as Ergun Lümali, who heads the group works council, pushed back in an interview published Friday in WirtschaftsWoche against the board's threats over possible plant closures — while simultaneously holding out the prospect of talks.
The friction over the company's German footprint had already sharpened earlier in the week. According to media accounts, the executive board found itself in a tense confrontation with employee representatives over the cost-cutting programme, with the question of site shutdowns on the table. Lümali rejected any suggestion that the workforce bore responsibility for the recent earnings pressure, though he stressed a desire for a workable settlement.
Charting the Damage
For shareholders, the timing is uncomfortable. The stock trades at EUR 39.22, barely above the 52-week low of EUR 38.90 touched the previous day, and has shed 35% since the start of the year. A gain of 0.5% to EUR 39.42 was recorded during Friday's session.
The technical picture now hinges on a single level. As long as the recent annual trough at EUR 38.90 holds, a stabilisation at depressed levels remains possible. A sustained break below it would bring the Exane BNP Paribas target of EUR 38.60 into immediate focus and entrench the downtrend.
Should investors sell immediately? Or is it worth buying Mercedes-Benz?
The Cost Question at the Balance Sheet
What matters most for valuation is whether management and the works council can agree on capacity adjustments without expensive labour disputes or drawn-out friction eroding operating profit.
Lümali is pressing for joint solutions, future investment and a clear role for employees in the transformation. The board, for its part, must respond to shifting global market structures with a leaner cost base. Should fixed costs not be aligned quickly with lower volumes in the high-margin luxury segment, profitability risks further erosion. A viable compromise, by contrast, could lay the groundwork for a more stable margin structure in the years ahead.
A Record Order Book in Electric Drives
The case for optimism rests on momentum in the European model range. While the traditional business weakens overseas, the group posted significant gains in fully electric vehicles during the third quarter.
Deliveries of battery-electric passenger cars reached a record. The all-electric variants of the GLC, CLA, GLB and GLA are already sold out in Europe for the remainder of the year, with orders extending into 2027.
If Mercedes-Benz can convert that demand into profitable deliveries quickly while agreeing an orderly efficiency programme with the works council, the recent share-price slide may prove an overshoot. A peaceful settlement without strike threats would reduce uncertainty and could allow the stock to build a durable base, supported by the healthy electric order book.
China's Drag and the Risk of Entrenched Conflict
Set against that is the real danger of escalation on two fronts. Operationally, a swift recovery in China's premium market is far from assured. Should demand there stay subdued for longer, the group loses its most important earnings pillar for high-margin combustion models and luxury saloons — and growth in smaller European EVs can hardly fill that gap in the short term.
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On costs, a stalemate looms. If the works council mounts hard resistance to planned closures or site downsizing, savings could be delayed. Should talks collapse over irreconcilable positions, severance payments, restructuring provisions or operational disruption could weigh on coming quarters, likely triggering further downgrades and added selling pressure.
Paris as a Distraction, October 28 as the Verdict
Management is meanwhile trying to shift attention back to the product line-up. At the Paris Motor Show, running from October 12 to 18, several premieres are planned, including the GLA and GLE as well as the AMG CLA 45. The AMG GT 4-door coupé, the electric VLE and the new S-Class round out the presentation. The press conference is scheduled for October 12.
Financially, the backdrop stays difficult. Jefferies analyst Philippe Houchois reported on Thursday, following contact with the company, that the finance chief struck a cautious tone. The passenger-car margin guidance of 3% to 5% for full-year 2026 could be undershot in the third quarter, he noted.
Detailed figures arrive on October 28, when the group publishes its interim report and hosts an analyst conference. Until then, the board and employee representatives must show whether they can move toward each other on restructuring. Only the hard numbers and management's comments on the site talks will reveal whether the automaker has already passed its low point.
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