Risk Reward Update

Research evidence excerpt

Risk Reward Update

on: Positive

Key: Historical Stock Performance Current Stock Price Price Target Electric Vehicles: Negative

Self-help: Positive

Source: Refinitiv, Morgan Stanley Research, Morgan Stanley Institutional Equities Division. The probabilities of our Bull,

Base, and Bear case scenarios playing out were estimated with implied volatility data from the options market as of 20 View descriptions of Risk Rewards Themes here

Jul 2026. All figures are approximate risk-neutral probabilities of the stock reaching beyond the scenario price in either

three-months’ or one-years’ time. View explanation of Options Probabilities methodology here

BULL CASE €69.00 BASE CASE €58.00 BEAR CASE €40.00

8.4x bull case FY27e EPS of ~€8.3 8.8x base case FY27e EPS of ~€6.6 8.7x bear case FY27e EPS of ~€4.6

Assumes that better sustained global We value Mercedes on 8.8x estimated FY27 Assumes that weak global markets and high

growth supports strong net pricing, taking EPS, in-line with the long-term average of rates cause group unit sales to fall, whilst

the group adj. EBIT margin to 7.4%. ~9x. Whilst price/mix normalisation will pricing pressure persists, leading to a drop in

Mercedes is able to sustain strong ASP impact the company to an extent, we think group revenues. Mercedes' group adj. EBIT

growth, and with a supportive cost Mercedes' shareholder return strategy margin falls back to ~4.8%. Through

backdrop, margins return to normalised creates opportunity for greater dividends subsidies, BEV demand returns, leaving the

levels. Management continues to execute and share buybacks, thus continuing to drive product offering out of position. This pushes

well and rewards the market with greater outperformance. EPS back towards €4.6. In this scenario, we

shareholder returns.