DaimlerChrysle 'BUY' status given

LONDON, September 13 (newratings.com) - Analyst Henning Wagener of AC Research reiterates his "buy" rating on DaimlerChrysler (DCX.ETR).

According to AC Research’s research note dated September 12 and published this morning, the company has reported its sales results for August 2006. Mercedes Car Group’s global sales were up 1.2% to 88,600 vehicles last month. While Mercedes-Benz sales recorded a 3.2% growth rate to 81,700 vehicles, Smart suffered a decline of 18.2% to 6,900 vehicles. In the first eight months of the current fiscal year, deliveries by Mercedes-Benz, Maybach, and Smart were up 6.9% to 818,000 units. While Mercedes-Benz recorded 10.8% growth to 739,000 vehicles, Smart was forced to suffer a 19.8% decline to 78,400 units.

In all, the analyst considers the published results as satisfactory. AC Research adds, however, that the ongoing weak performance of Smart continues to cause some concern. After dumping the four-seat "forfour" model, Smart has only one model remaining in its product pipeline with the "fortwo."For the full year of 2006, DaimlerChrysler continues to expect passenger car sales to reach at least last year’s level. While one may expect Mercedes-Benz to continue recording sales growth, Smart is expected to lose some additional ground, the analyst says. At the current share price of €40.64 and a 2007 P/E ratio of about 10, the company’s stock still seems to enjoy a rather moderate rating. Current developments at Chrysler give some reason for concern in view of the rather weak US car sales in July and August. Experts see more chances than risks, however, for an investment in the company’s stock due to the relatively low rating level. AC Research reiterates its "buy" rating on DaimlerChrysler.