Daimler AGDAI

Morningstar Rating

Stock Research and Analysis

by David Whiston, CPA, CFE

With brands such as Mercedes-Benz and Maybach, Daimler AG possesses some of the top luxury car brands in the world. This brand equity, combined with cost-cutting initiatives, gives Daimler a great chance to report strong profits once vehicle demand Read more

Bulls Say

Daimler's luxury brands are some of the most valuable in the world and give the company some protection against the cyclical downturns of auto sales.

Mercedes-Benz is recognized in developed and emerging markets as the standard in luxury automobiles.

Daimler's strong R&D capabilities and advanced diesel technologies should prove valuable as gas prices rise worldwide and consumers search for alternatives to gasoline internal combustion engines.

Aabar Investments' 2009 stock purchase improves liquidity.

Recent quality problems appear to be solved, which preserves brand equity. Read more

Bears Say

China's luxury market is becoming more competitive than in the past.

Environmental laws are becoming stricter, which will make cars more expensive to produce and more expensive for consumers to buy.

Plummeting demand and the weak dollar will make increasing profits harder for Daimler.

The auto industry suffers from global overcapacity, which creates pricing pressure and makes it difficult to earn high economic profits for all participants.

Although Daimler is free of UAW problems in America, it still has a large union in Germany to keep happy. Read more

Strategy

Daimler's strategy revolves around four components: Fascinating brands and compelling products; operational excellence; emerging-market expansion; and technological innovation. Each of these areas applies Read more

Management

Dieter Zetsche was named chairman of the board of management (equivalent to a U.S. CEO) in August 2005. Zetsche has proven his ability to make steady operational improvements, and actions such as the sale of Chrysler, previously increasing the dividend Read more

Profile

Since inventing the automobile in 1886, Daimler AG has grown into one of the world's top automakers with car brands such as Mercedes-Benz, Maybach, and smart. The company Read more

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