Mercedes-Benz Shares Tread Water as Strikes Brew and Analysts Turn Cautiously Bullish

Shares rose 2.5% on Jefferies upgrade and Vercel F1 partnership, but YTD losses near 27% as worker strikes and weak 4.1% car margin pressure the automaker.

A storm is gathering on the factory floor, yet the market is keeping its cool. Mercedes-Benz shares inched higher on Friday as investors weighed a fresh analyst upgrade and a new Formula 1 technology tie-up against the growing threat of industrial action and persistently weak margins.

The stock changed hands at €45.06 in afternoon trading, up roughly 2.5% on the day. That gain, however, does little to dent a brutal year-to-date slide of nearly 27% — leaving the shares more than 18% below their 200-day moving average and barely above the 2025 low of €42.64 touched in late June.

Vercel deal adds digital gloss, but not cash

Mercedes-Benz’s factory racing team has inked a multi-year partnership with Vercel, a developer platform provider tasked with speeding up the team’s digital fan experiences. The Vercel logo already appeared on cars at the British Grand Prix. The deal does not alter the team’s operational structure — Mercedes-Benz continues to supply the powertrain and chassis, with more than 1,000 employees working on the cars at two UK sites.

While the marketing buzz is welcome, it does nothing to address the core challenge facing the company: the profitability of its car business. In the first quarter, Mercedes-Benz posted group revenue of €31.6 billion and operating profit of €1.9 billion. The crucial passenger car division eked out an operating margin of just 4.1% — at the lower end of the full-year guidance.

Worker unrest escalates on cost-cutting drive

That margin pressure is the root cause of the internal conflict now boiling over. The IG Metall union has called for nationwide strikes on Friday, with thousands of protesters expected in Bremen alone. The flashpoint is management’s aggressive cost-saving programme, which seeks to deny roughly 90,000 employees a contractual special payment and postpone any bonus until 2027. The board is also demanding unpaid overtime to boost productivity.

Union leaders accuse the board of shifting the burden of weak earnings onto workers. The company defends the measures as necessary: first-quarter group profit shrank by around 17%, and last year’s full-year net profit was cut in half to €5.3 billion.

Jefferies upgrades, but cuts target

Against this tense backdrop, Jefferies has upgraded Mercedes-Benz shares to “buy” — though the US investment bank simultaneously trimmed its price target to €52 from a previous level. The analysts see the stock as more attractively valued after the deep sell-off, even as they acknowledge a tough road ahead.

Separately, the Formula 1 team received some positive regulatory news: the FIA approved a motor upgrade, adding a further ray of light to the Vercel announcement.

What to watch next

The immediate calendar is packed. Management will host a pre-close call on July 14, followed by the full second-quarter report on July 28. If Friday’s strikes fail to disrupt production meaningfully, the stock could find some short-term stability. But the real catalyst remains an inflection in passenger-car margins. Mercedes-Benz is rolling out more than 40 new models by 2027, including the electric VLE van, but for now the market wants proof of delivery. Without a measurable improvement in the car division’s profitability in the next quarterly update, the shares risk sliding below the recent floor of roughly €42.