Mercedes-Benz Buys Back 875,000 Shares as Citi Flags Sub-3% Margin Risk

Mercedes-Benz disclosed 875,000 shares repurchased as Citi cut its price target to EUR 42, warning of passenger-car margins below 3.0 percent.

Mercedes-Benz is leaning on its own balance sheet to steady investor nerves ahead of a pivotal earnings release, disclosing a fresh round of share repurchases while analysts sharpen their warnings about profitability at Europe's premium automakers.

Buyback Details and BlackRock Stake

In a mandatory filing on Monday, the Stuttgart-based group confirmed it acquired 875,000 of its own shares between September 28 and October 2, paying EUR 35,637,298.00 for the batch. The purchases fall under an existing authorization that permits the company to buy back as many as 58 million shares — a program worth up to EUR 1 billion — through April 6, 2027. Shrinking the share count is the intended message of stability to the capital market.

Separately, asset manager BlackRock adjusted its holdings. Its voting rights in the Dax-listed carmaker now stand at 5.87 percent, or 6.04 percent when financial instruments are included.

A Split Sales Picture

The buyback news landed one day after Mercedes-Benz reported third-quarter deliveries, and the figures cut in two directions. Group-wide, 491,700 passenger cars and vans were handed over to customers, a decline of 6 percent from a year earlier. China did the heaviest damage: passenger-car sales there collapsed 31 percent to just under 87,000 units, according to Reuters, dragging global passenger-car volumes down 8 percent.

Battery-electric vehicles told the opposite story. Sales of pure EVs across all divisions jumped 52 percent to 78,100 units, and the core passenger-car brand notched a quarterly record with 68,400 fully electric cars. Demand in Europe proved especially robust — the electric CLA, GLC, GLB and GLA are sold out for the remainder of the calendar year, with order books already stretching into 2027.

Citi Cuts Its Target, Warns on Margins

Enthusiasm over the electric lineup has not carried over to the analyst community. On Tuesday, Citigroup lowered its price target on the stock from EUR 51 to EUR 42 while keeping a Neutral rating, pointing to mounting earnings risks across European manufacturers. The bank raised the possibility of an operating margin below 3.0 percent for the passenger-car division.

A shifting model mix, fierce price competition and rising raw-material costs are all cited as drags on profitability, which has pushed internal spending into the spotlight.

Labor Cost Talks Underway

Citing people familiar with the matter, WirtschaftsWoche reported that the group plans to trim German labor costs by EUR 800 million, potentially through adjustments to bonus payments or longer working hours. Mercedes-Benz declined to confirm the figure, saying only that discussions are ongoing.

Market Reaction and What Comes Next

Investors have been voting with their feet. The stock shed 1.9 percent in today's session to change hands at EUR 39.15, extending its year-to-date decline to 35 percent.

The real test arrives at the end of the month. On October 28, Mercedes-Benz publishes its official third-quarter interim report and hosts the accompanying analyst call — the moment when the market will learn how much the electric-vehicle momentum can cushion the headwinds buffeting conventional car sales.