Daimler AG will be formally renamed Mercedes-Benz Group AG on Tuesday – nearly a year after the spin-off of its truck and bus division was announced – in a move its boss expects that unlocks shareholder value for the premium automaker.

The change is the latest in a series of restructurings at the automaker, which began life as Daimler-Benz AG in 1926. The Mercedes brand, named after the daughter of an automobile entrepreneur, was officially adopted by Daimler AG in 1902.

“We have a real opportunity to raise the multiple,” Chief Executive Ola Kaellenius told reporters on Friday, without providing a specific valuation for the company, which is now worth just under $85.7 billion.

Shares in Daimler Truck AG, spun off from newly formed Mercedes-Benz last December, have risen slightly since their market debut to trade at 32.23 euros on Friday. Shares of Mercedes-Benz, which reached its highest since 2015 in November 2021, reached 74.25 euros on the day of the spin-off, but have since dropped to 71.15 euros.

Still, a premium automaker fighting for a luxury market – by definition small and finite – could only grow so far, analysts say.

“Investors could start looking at Mercedes as a type of Lucid Motors or Tesla and start giving it an EV (electric vehicle) multiple,” said Tom Narayan of RBC Capital Markets.

“But Lucid and Tesla started with a 100% EV. Mercedes has to convert its current ICM (internal combustion engine) business into an EV one. That may be a limitation on how far the multiple could go in the short term.” he added.

Daniel Schwarz, managing director of Stifel, said the valuations reflect the view that German brands are on the defensive, forced to protect their market share. “Tesla’s valuation is based on the assumption that it will gain market share from German automakers, which do not have comparable revenue growth potential,” he said.

Categorized in:

Latest