We believe the most interesting trade should be buying DTG around the close tomorrow as Index trackers sell their shares ahead of DTG being removed from the DAX (at close on Dec 10th)
1/ Updated SOP
Theoretically, and using our valuation assumptions, there is still 17% upside to DAI’s last price of €86.2. How long could it take to materialise is the key unknown
Remember that a DAI shareholder only receives 0.5 DTG share per DAI share hence our estimate of a DTG price of €43.5 but an implied value per DAI share of €21.7
2/ Mercedes (DAI GY) Share price
Mercedes should be trading around €79 using the key following assumptions:
- Valuation of Mercedes at 3.8x EV/EBIT 22E
- 11% discount to Mercedes NAV (we currently have a 22% discount of the whole DAI to its NAV)
Coming up with a price requires making several assumptions so we are presenting below a sensitivity matrix:
- If the discount remains the same at 11% and Mercedes trades on BMW multiple, the price could be €95/100 (some believe it should actually trade in line with BMW)
- If the multiple is the same as our base case at 3.8x but without any discount, the price could be €89
3/ Daimler Trucks (DTG GY) Share price
Daimler Trucks should be trading around €43.5 using the key following assumptions:
- Valuation of DTG at 8.6x EV/EBIT 22E
- We are using a 15% discount to Traton/Paccar
Again, the multiple to be applied is anyone’s guess but if Daimler Trucks trades in line with Traton/Paccar, the price could be €49/51
