Mercedes-Benz Shares Stay Grounded Despite Jefferies Upgrade and Vercel F1 Deal

Mercedes-Benz finds itself in a curious moment: a fresh technology partnership in Formula 1 and an unexpected analyst upgrade have done little to shake the stock from its floor. The automaker’s shares closed Wednesday at €43.95, a stone’s throw above the 52-week low of €42.64 hit just days earlier, as a steep year-to-date decline of 28.72% keeps investor sentiment in check.

The Mercedes-AMG PETRONAS Formula One team on July 1 announced a multi-year collaboration with Vercel, a cloud platform company that will help accelerate digital experiences for fans and partners. The Vercel logo will appear on the cars from the British Grand Prix (July 2–5), and the partnership is set to expand significantly in 2027 with global brand rights, hospitality programmes and deeper technical integration. No financial details were disclosed, meaning the deal’s immediate impact on Mercedes-Benz Group earnings is negligible. For the carmaker, Formula 1 remains a marketing and technology showcase rather than a profit lever.

While the Vercel announcement made headlines in the paddock, a more substantive driver of potential recovery came from Jefferies. The investment bank upgraded the stock from “Hold” to “Buy” even as it lowered its price target from €60 to €52. The rationale: operating headwinds are already reflected in the share price, and restructuring progress – particularly on fixed costs – is further along than the market appreciates. Jefferies noted that Mercedes-Benz has largely hit its 2027 fixed-cost reduction targets early, though material costs remain behind schedule. UBS struck a more cautious tone, maintaining a “Neutral” rating with a €55 target.

Should investors sell immediately? Or is it worth buying Mercedes-Benz?

The stock’s technical picture underscores the strain. It now sits 9.70% below its 50-day moving average and roughly 20% beneath the 200-day line at €54.90. The relative strength index at 33.9 points to oversold territory, a condition that sometimes attracts dip-buyers but has so far failed to stem the slide.

A recent €3 billion share buyback did nothing to reverse the downtrend, and the underlying business continues to weigh. In the first quarter, Mercedes-Benz posted revenue of €31.6 billion and group EBIT of €1.9 billion, with the cars division achieving an adjusted return on sales of 4.1% – within the full-year guidance band of 3% to 5%. Free cash flow from the industrial business came in at €1.86 billion, but weak sales momentum, pricing pressure and exposure to the Chinese market remain persistent concerns.

The next catalyst arrives on July 14, when management delivers a pre-close call offering early indications on second-quarter performance. The full quarterly report follows on July 28. If cost discipline and the planned launch of more than 40 new models between 2025 and 2027 – including the fully electric VLE van – begin to translate into measurable profitability, the current chart weakness could give way to a brighter tone. Until then, the Vercel partnership and the Jefferies upgrade are welcome signals, but they are not enough to lift a stock that has spent most of the year hugging its lows.