Although Ferrari has managed just one podium finish so far in 2014, Mercedes believes that the potential of the F14 T - allied to the brilliance of Fernando Alonso - means the Italian squad rather than Red Bull is its main rival.
When asked who he believes Mercedes' main rival for the title would be, motorsport boss Toto Wolff said: "I think it will be Ferrari.
"They are the only other team to have everything, car and powertrain, in-house.
"And I reckon Alonso to be a real race monster who can achieve everything".
This weekend's Spanish Grand Prix is viewed as a key race for the title battle, with all teams bringing aerodynamic updates that could shuffle up the order.
Wolff believes that the form shown at the Barcelona circuit would indicate just how much of an advantage his team had, and especially whether Red Bull can make the steps it needs to be fully back in the hunt for wins.
"I am not afraid of this race, but we enter it with a lot of respect," he said.
"Catalunya will prove how good our car really is, because we compete there on a Red Bull track.
"Red Bull's progress in the recent races was extraordinary, so Catalunya will really be a benchmark for everyone."
He added: "We all know it will become tighter and more difficult for us. If you look at Red Bull in Jerez in the first test and where they went from there, they really made impressive progress.
"And Ferrari showed excellent shape too lately. So nothing is guaranteed".
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