European recovery could boost Daimler shares image

According to Barron’s March edition, the return to growth of the European region could further boost the consumer demand for premium brands – which could in turn relate to the recent gains by Mercedes-Benz.

Daimler could see its shares boosted by the better economic climate, with very good results for its passenger car business, and even strong gains for the truck business – including the Freightliner and Western Star US brands.

The business weekly says that already Daimler is faring better than its main rivals – trading at around 12 times its forecasted profit, while BMW is at the 10 mark and Audi’s Volkswagen parent at 8 multiples. And the situation could soon become even better.

Last year Daimler’s share price went up by 48% and Barron’s predicts that it’s still going to climb – up to 19% from the current trading price of 67.44 euros to as much as 80. The situation is aided by the slight return of sales in the European region but also because of strong numbers posted by the increased line of the Mercedes-Benz brand.

Compact cars like the A and B-Class had astonishing gains last year, surging 66% to account for a quarter of the brand’s total sales, while in the US the CLA sedan, the automaker’s under-$30,000 vehicle attracted buyers with an age limit way lower than what’s usual for the German brand.

Via Reuters