If you are wondering whether Mercedes-Benz Group is still good value after its strong run, or if the easy money has already been made, you are not alone. That is exactly what we are going to unpack here.
The stock has climbed 3.9% over the last week, 7.4% over the past month, and is now up 14.3% year to date. This adds to an impressive 23.0% gain over 1 year and 78.4% over 5 years that has clearly caught the market’s attention.
Recent headlines have focused on Mercedes-Benz doubling down on higher margin premium and electric models, alongside strategic partnerships in software and autonomous driving that aim to protect its luxury moat. At the same time, investors are watching how its capital allocation, especially buybacks and dividends, balances growth ambitions with shareholder returns.
On our framework, Mercedes-Benz Group currently scores 4/6 on valuation checks, suggesting the shares look undervalued on several key metrics. Next we will break down what that means across different valuation approaches before circling back to a more nuanced way of thinking about fair value at the end of the article.
Mercedes-Benz Group delivered 23.0% returns over the last year. See how this stacks up to the rest of the Auto industry.
A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in € terms.
For Mercedes-Benz Group, the model starts with last twelve months Free Cash Flow of about €13.0 billion and then applies a 2 stage Free Cash Flow to Equity approach. Analyst forecasts drive the first few years, with Simply Wall St extrapolating further out, leading to projected Free Cash Flow of around €7.1 billion in 2035. These future cash flows are discounted back to today and combined with a terminal value to arrive at an intrinsic value per share.
On this basis, the DCF model indicates a fair value of approximately €73.58 per share. This implies the stock trades at about a 17.9% discount to its estimated intrinsic value. In other words, the current market price suggests investors are paying materially less than what the cash flow projections would justify.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Mercedes-Benz Group is undervalued by 17.9%. Track this in your watchlist or portfolio, or discover 914 more undervalued stocks based on cash flows.
MBG Discounted Cash Flow as at Dec 2025
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Mercedes-Benz Group.
For profitable, mature businesses like Mercedes-Benz Group, the Price to Earnings ratio is a useful yardstick because it directly links what investors pay today to the profits the company is generating right now. In general, higher expected growth and lower perceived risk justify a higher, or more generous, PE multiple, while slower growth or higher risk should translate into a lower multiple.
Mercedes-Benz currently trades on a PE of about 9.27x, which is well below both the auto industry average of around 18.58x and the broader peer group at roughly 18.86x. Simply Wall St also calculates a proprietary Fair Ratio of 12.85x, which indicates what a reasonable PE might be once factors like earnings growth, profit margins, company size, industry dynamics, and specific risks are all taken into account.
This Fair Ratio framework is more tailored than a simple comparison with peers or the industry because it adjusts for the company’s own growth profile and risk-return trade-off instead of assuming all carmakers deserve the same multiple. With the current PE of 9.27x sitting well below the Fair Ratio of 12.85x, the shares appear to be attractively priced on earnings.
Result: UNDERVALUED
XTRA:MBG PE Ratio as at Dec 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1441 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company, translated into specific assumptions for future revenue, earnings, margins, and ultimately fair value. A Narrative connects three things in one place: the business story you believe, the financial forecast that flows from that story, and the fair value that those numbers imply, making it much easier to see whether your view really justifies buying, holding, or selling the stock. On Simply Wall St, millions of investors build and share these Narratives on the Mercedes-Benz Group Community page, where you can quickly compare your own fair value with others and with the live share price to decide if the stock looks expensive or cheap right now. Because Narratives are updated automatically when new earnings, news, or guidance arrive, your fair value view evolves in real time instead of going stale. For example, one Mercedes-Benz Narrative might lean bullish with a fair value near €83.0 based on strong EV adoption and premium pricing, while another might be more cautious around €40.0 due to China demand risks and industry margin pressure.
Do you think there’s more to the story for Mercedes-Benz Group? Head over to our Community to see what others are saying!
XTRA:MBG Community Fair Values as at Dec 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include MBG.DE.
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