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Continental AG
(OTC:CTTAY)
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Rating:55Neutral
Price Target:
$8.00
▲(0.38% Upside)
Action:Reiterated
Date:08/07/26
The score is held back primarily by weakened recent profitability and higher leverage in the financial statements, plus bearish-to-neutral technical momentum. These are partly offset by solid cash generation and a comparatively positive earnings-call outlook featuring reaffirmed guidance, improving margins/free cash flow, and a major portfolio action (ContiTech sale) aimed at shareholder returns and deleveraging.
Positive Factors
Strong cash generation (TTM)
Sustained operating and free cash flow recovery provides durable financial flexibility: it funds capex, working capital and shareholder returns while servicing debt. Over 2–6 months, reliable cash conversion reduces refinancing risk and enables execution of deleveraging and strategic investments even with earnings volatility.
Negative Factors
Elevated leverage
Leverage materially above historical levels constrains strategic flexibility and raises sensitivity to cyclical downturns. Even with planned proceeds, the company must execute deleveraging and sustain cash flow to hit sub‑1.0x targets; high debt increases refinancing, interest and covenant risks across the 2–6 month horizon if macro shocks occur.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation (TTM)
Sustained operating and free cash flow recovery provides durable financial flexibility: it funds capex, working capital and shareholder returns while servicing debt. Over 2–6 months, reliable cash conversion reduces refinancing risk and enables execution of deleveraging and strategic investments even with earnings volatility.
Read all positive factors
Continental AG (CTTAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.87B
Dividend Yield3.97%
Average Volume (3M)1.37K
Price to Earnings (P/E)―
Beta (1Y)0.71
Revenue Growth-36.20%
EPS Growth-119.00%
CountryUS
Employees96,426
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)-0.13
Shares Outstanding2,000,059,800
10 Day Avg. Volume0
30 Day Avg. Volume1,371
Financial Highlights & Ratios
PEG Ratio0.73
Price to Book (P/B)3.46
Price to Sales (P/S)0.69
P/FCF Ratio12.65
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.65
Revenue Forecast (FY)$16.79B
Continental AG Business Overview & Revenue Model
Company Description
Continental AG, a technology enterprise headquartered in Hanover, Germany, was founded in 1871 and was previously known as Continental-Caoutchouc- und Gutta-Percha Compagnie. The company delivers intelligent solutions worldwide for vehicles, machi...
How the Company Makes Money
Continental primarily makes money by selling (1) automotive technology components and systems to vehicle manufacturers and (2) tires to both OEMs and the replacement (aftermarket) channel. In its automotive activities, revenue is generated from su...
Continental AG Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call presented a mix of strong operational and financial achievements—most notably improved margins, a significant free cash flow recovery, a clear strategic milestone with the ContiTech sale and concrete plans for shareholder returns—while also acknowledging ongoing demand weakness, volume headwinds and an expected raw-material cost reversal in H2. Management confirmed guidance for continuing operations but took a deliberately conservative outlook for H2 and reiterated the need for deleveraging after the ContiTech closing. Overall the company appears to be executing its strategic plan and improving profitability, but near-term market and cost risks remain.Positive Updates
ContiTech transaction and planned uses of proceeds
Signed sale of ContiTech for an enterprise value of EUR 4.0 billion plus up to EUR 250 million performance component; expected net cash proceeds at closing ~EUR 3.1 billion. Intention to use ~EUR 2.5 billion for shareholder returns (special dividend and/or buybacks) and ~EUR 600 million for deleveraging; supports midterm leverage target below 1.0x by 2029.
Negative Updates
Reported sales decline driven by portfolio changes
Group reported sales in Q2 were EUR 4.4 billion versus ~EUR 4.9 billion a year ago (reported decline ~EUR 0.5 billion), primarily due to prior-year sale of OESL/ContiTech OE-related business; organic group sales were broadly stable at -0.3%.
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Q2-2026 Updates
Positive
Negative
ContiTech transaction and planned uses of proceeds
Signed sale of ContiTech for an enterprise value of EUR 4.0 billion plus up to EUR 250 million performance component; expected net cash proceeds at closing ~EUR 3.1 billion. Intention to use ~EUR 2.5 billion for shareholder returns (special dividend and/or buybacks) and ~EUR 600 million for deleveraging; supports midterm leverage target below 1.0x by 2029.
Read all positive updates
Company Guidance
Continental updated guidance (with ContiTech treated as discontinued) for continuing operations: consolidated sales of around EUR 13.2–14.2 billion, an adjusted EBIT margin of c.12.0–13.5%, and adjusted free cash flow of about EUR 0.7–1.1 billion, while special effects from continuing operations are expected at around -EUR 200 million and CapEx at c.7–8% of sales (PPA amortization no longer material for Tires). Management said Tires should deliver the underlying assumptions (profitability likely in the upper half of the Tires margin range while sales are expected around or slightly below the midpoint), and reiterated a midterm leverage target of below 1.0x by 2029; pro forma leverage stood at 2.0x with net debt of EUR 5.5 billion. In addition, the ContiTech transaction carries an agreed enterprise value of EUR 4.0 billion plus up to EUR 250 million performance consideration, expected net cash proceeds of ~EUR 3.1 billion at closing (to be allocated roughly EUR 2.5 billion to shareholder returns and ~EUR 600 million to deleveraging).Continental AG Financial Statement Overview
Summary
Income Statement
43
Neutral
Balance Sheet
52
Neutral
Cash Flow
68
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.76B | 19.68B | 39.72B | 41.42B | 39.41B | 33.77B |
| Gross Profit | 5.01B | 5.11B | 8.80B | 8.81B | 8.31B | 7.74B |
| EBITDA | 2.01B | 1.91B | 4.55B | 4.21B | 4.01B | 4.11B |
| Net Income | -257.17M | -165.00M | 1.17B | 1.16B | 112.20M | 1.44B |
Balance Sheet | ||||||
| Total Assets | 17.56B | 17.79B | 36.97B | 37.75B | 37.93B | 35.84B |
| Cash, Cash Equivalents and Short-Term Investments | 884.63M | 1.57B | 2.72B | 2.92B | 2.44B | 2.00B |
| Total Debt | 6.87B | 6.82B | 6.88B | 7.16B | 7.67B | 6.24B |
| Total Liabilities | 13.18B | 13.63B | 22.17B | 23.63B | 24.19B | 23.20B |
| Stockholders Equity | 4.20B | 3.93B | 14.35B | 13.68B | 13.26B | 12.19B |
Cash Flow | ||||||
| Free Cash Flow | 1.62B | 1.08B | 980.00M | 1.18B | 126.30M | 1.08B |
| Operating Cash Flow | 2.50B | 2.11B | 2.93B | 3.33B | 2.30B | 2.95B |
| Investing Cash Flow | -1.18B | -1.36B | -1.82B | -2.17B | -2.20B | -1.58B |
| Financing Cash Flow | -1.98B | -129.67M | -1.07B | -1.13B | 653.50M | -1.16B |
Continental AG Technical Analysis
Positive
7.97
Price Trends
8.17
Negative
7.92
Positive
7.73
Positive
Market Momentum
-0.06
Negative
49.66
Neutral
32.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTTAY, the sentiment is Positive. The current price of 7.97 is below the 20-day moving average (MA) of 8.03, below the 50-day MA of 8.17, and above the 200-day MA of 7.73, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 49.66 is Neutral, neither overbought nor oversold. The STOCH value of 32.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CTTAY.
Continental AG Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $8.91B | 14.70 | 25.10% | 2.94% | 5.89% | -7.00% | |
68 Neutral | $13.20B | 33.89 | 7.37% | 1.06% | 2.17% | 111.19% | |
67 Neutral | $6.19B | 11.94 | 10.90% | 2.14% | 3.55% | 25.67% | |
63 Neutral | $2.81B | 18.92 | 9.71% | 1.23% | -1.13% | -47.30% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $15.87B | -51.91 | -6.46% | 4.00% | -36.20% | -119.00% | |
53 Neutral | $9.76B | 45.98 | 2.41% | ― | -5.40% | -75.68% |
* Consumer Cyclical Sector Average
CTTAY
Continental AG
8.03
1.18
17.19%
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VC
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-14.67%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.