With chip shortages hitting the car manufacturing sector, most companies revised their full-year delivery expectations, barring only a few big brand names. One such is Mercedes-Benz (ETR: MBG), whose CEO, Ola Kallenius, claims their sales in China are robust despite Covid lockdowns.
Namely, during an interview with CNBC’s Squawk box Europe on October 17, Kallenius claimed that the firm had its ups and downs, but sales in China remain resilient.
“All in all, we have had quite a robust sales situation in the Chinese market. And, bar the lockdown we saw in Shanghai in Q2, we have rebounded quite well. We will see how things develop, but at the moment, it seems like our operations are quite stable.”
He then added on the importance of the Chinese market:
“China is our biggest and most important market, and in fact, it has been the biggest source of growth over the last ten years. And if we look into the future, it will continue to be a source of growth. At the same time, in this day and age, to create optionality and make sure you capture all of the other growth opportunities around the world.”
Earlier this year, after posting a strong quarter, Mercedes-Benz indicated that they see the chip shortage stretching into 2023.
MBG chart and analysis
MBG is currently trading in the lower part of its 52-week range, similar to the S&P 500 index, thus not making the stock an exception. However, the stock shows a bear flag pattern, making it an exception. This pattern occurs after a strong pullback in price and often indicates more downward momentum.
Technical analysis indicates two important support areas, a support line at €52.34 (~$50.95) and a resistance zone from €55.15 to €56.26 (~$53.69 to $54.77).
On Wall Street, analysts rate the stock a ‘strong buy,’ with the average price in the next 12 months expected to reach €83.54 (~$81.35), 52.75% higher than the current trading price of €54.69 (~$53.26). Out of 14 Wall Street analysts, 12 have a ‘buy’ rating, and two have a ‘hold’ rating, notably none advocate to ‘sell.’
With Mercedes–Benz group working towards creating a more resilient supply chain across the globe, according to the CEO, and the fact that sales are doing well, despite numerous macro challenges on the horizon, indicates the strength of the Mercedes brand and the firm as a whole.
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Source: https://finbold.com/wall-street-bullish-on-mercedes-benz-as-ceo-says-china-sales-strong-despite-zero-covid-policies/