Börse Express – Daimler stock: Why is it down 13.84% and Daimler Truck stock is up 6.34%

With the success of electric and hydrogen vehicles, this has changed for Daimler (WKN: 710000) Many. The group actually had to make tough cuts in order to remain profitable. the Participate Also saddled with allegations of exhaust gas tampering since 2015. But fortunately, the company managed to turn things around last year (2020). Since the low point in March 2020, the Participate By more than 238% (12/10/2021).

Daimler has separated from its truck and bus business

The group decided to place its commercial vehicle business on the stock exchange independently. It will take now Daimler Truck Holdings (WKN: DTR0CK) is traded on the stock exchange. There are many reasons for this step. This opens up more strategic options for Daimler in general and increases flexibility.

With the IPO, the group receives new investors and generates more income in this way, which is urgently needed to convert to electric and hydrogen trucks and buses. If, contrary to all expectations, the commercial vehicle division does not develop positively, then Daimler can simply sell the stake in the future. After the IPO, the group owns 35% of the shares of Daimler Truck.

Since the auto and commercial vehicle business is now separately listed on the stock exchange, the pressure on each individual region is growing at the same time. Previously, Daimler often compensated the failure of one part for the success of the other. In addition, companies can now implement cost-cutting measures more easily in difficult situations.

Why did Daimler’s share drop?

The reason for this is very simple. Shareholders received one Daimler Truck share for two Daimler shares. If we add the percentages, they have increased in total today (December 10, 2021). Investors can rest assured. However, whether they hold both shares should depend on the development of the company’s business.

The commercial vehicle division was not very profitable even before the 2020 crisis. In 2019 and 2018, the net profit margin was only 3.8 and 4.2%, respectively. In 2020, there was a loss of -131 million euros. The equity ratio was only 17.4% in 2020. So Daimler Truck could be a more dividend payout, but not a very strong and profitable stock. It is envisaged that Daimler’s share will develop better than that of Daimler Truck in the future. But the future must show this.

Commercial vehicle division should become more profitable

In the future, the Board of Directors will focus on increasing profitability. For the entire year of 2021, Daimler Truck is aiming for a return on sales of 6 to 8%. It is expected to rise to 7 to 9% as early as 2022 through cost cuts.

The commercial vehicle group wants to achieve a 60% share of electric and hydrogen vehicles in new sales by 2030. It should rise to 100% by 2039. However, due to competition pressures, change is likely to come faster.

clause Daimler stock: why it fell 13.84% and the share of Daimler Trucks rose 6.34% First appeared in Motley Fall Deutschland.

Christoph Welzel has no position in any of the stocks mentioned. The Motley Fool does not have a position in any of the stocks mentioned.

Motley Fall Deutschland 2021