For some years now, German car stocks have been more of a brake than an accelerator pedal for the German stock index Dax. Perhaps it took the interest rate turnaround to make companies with thick profit ratios appear more attractive again. Perhaps it also needed the first visible success stories in the sale of electric cars. Perhaps, however, the constant drop of exceptionally good business figures has undermined the firm-ended resistance of international investors to German auto stocks.
Daniel Mohr
Editor in business.
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In any case, they have been driving the Dax for a few months now. In particular, BMW and Mercedes, Porsche anyway, and to a lesser extent VW have risen significantly in the favor of investors. A visible sign of this was the rise of the BMW share to prices of more than 100 euros in Monday trading. The last time the share had achieved this was just over a year ago. At 100.48 euros, however, the highest price since December 2015 was reached in the morning. The record price of a good 123 euros from March 2015 is still some way away, but it is in sight and not as endlessly far away as in autumn, when the BMW share was quoted at 69 euros.
Almost 50 percent price increase in less than five months, which apparently attracts more and more interested investors. They are investing in a company that earned a whopping 2022 billion euros before taxes in the first nine months of 20, an increase of 54 percent compared to the record year 2021. In addition, there are free cash inflows of 10 billion euros (plus 56 percent) and an increase in the share of electric cars from 12 to 16 percent.
The fact that business in the premium class is running flawlessly was also shown on Friday by the Mercedes figures: net profit in 2022 of 15 billion euros, plus a third. The average car now costs 72,900 euros, 20,000 euros more than three years ago. The Mercedes share has even gained more than 50 percent since the autumn. The price on Monday remained at just over 75 euros just below the high of a year ago, and the high of 80.64 euros from 2015 is even closer than BMW.
Noteworthy is the ratio of price to profit (P/E), which is about 2023 for BMW and Mercedes, depending on the profit estimate for 5. A still very low value, which speaks for a favorable valuation of the shares. The market value of 80 billion euros for Mercedes and 65 billion euros for BMW is still far below the 600 billion euros for Tesla.
For the money, investors get a strongly fluctuating stock that has left its steep upward trend in 2022. The Tesla high of 384 euros is currently 194 euros far away. When the rally of German car stocks began in autumn, Tesla shares still cost around 300 euros. By the beginning of January, the price slumped to 102 euros. After that, a buoyant recovery began, but a minus in the past five months remains. Tesla's P/E ratio of 44 is also nine times as high as that of the German premium manufacturers.
The analysts remain fans of German car stocks, but investors also seem to be gradually changing their opinion of an allegedly doomed industry in the face of competition from Tesla, Google and Apple. Only the VW share is much further away from its old highs, with the plus since autumn including special dividend also almost 50 percent with a P/E ratio of only 4.