Continental Aktiengesellschaft (CON) AI Stock Analysis

• Market Cap: $14.20B
• Dividend Yield: 3.52%
• Average Volume (3M): 454.65K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 1.13
• Revenue Growth: -14.83%
• EPS Growth: 78.73%
• Country: DE
• Employees: 96,426
• Sector: Consumer Cyclical
• Sector Strength: 54
• Industry: Auto - Parts
• EPS (TTM): 1.06
• Shares Outstanding: 200,005,980
• 10 Day Avg. Volume: 507,644
• 30 Day Avg. Volume: 454,655
• PEG Ratio: -1.08
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 88.65
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $81.19
• Price Target Upside: 14.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 74 Outperform
• Price Target: €85.00 ▲(19.62%Upside)

Continental Aktiengesellschaft scores well due to strong technical momentum and reasonable valuation. The stable financial performance supports the stock's attractiveness, though some caution is warranted due to revenue and cash flow volatility. No significant earnings call or corporate events were factored in.

Positive Factors

Automotive and Tires outlook

CON hosted its public 1Q25 pre-close call with a constructive message on Automotive and Tires consistent with previous indications.

Tires revenue

CON sees higher replacement demand and positive price/mix in 2025, which implies that CON currently sees Tires revenue in the upper half of the range with downside protection if volumes turn out weaker than thought.

Negative Factors

Auto margin

The 4Q24 Auto margin came in weaker than expected on lower volumes and the FY24 Auto margin of 2.3% was below guidance of 2.5-3.5%.

ContiTech performance

ContiTech suffers from weak LV production and muted industrial demand.

Group EBIT guidance

CON's FY25 group adj. EBIT guidance implies c.8% downside vs current Visible Alpha consensus at the mid-point, with a soft revenue and margin outlook in Automotive.

Continental Aktiengesellschaft Business Overview & Revenue Model

Company Description

Continental Aktiengesellschaft, a technology company, offers intelligent solutions for vehicles, machines, traffic, and transportation worldwide. It operates through four sectors: Automotive, Tires, ContiTech, and Contract Manufacturing. The company offers safety, brake, chassis, motion, and motion control systems; solutions for assisted and automated driving; and audio and camera solutions for the vehicle interior, as well as intelligent information and communication technology solutions. It also provides tires for cars, trucks, buses, two-wheel and specialist vehicles, bicycles, and motor vehicles, as well as digital tire monitoring and management systems. In addition, the company develops and manufactures cross-material, environmentally friendly, and intelligent products and systems for automotive, railway engineering, mining, agriculture, and other industries, as well as provides contract manufacturing services. It sells its products through 944 company owned tire outlets and approximately 5,200 franchise locations The company was formerly known as Continental-Caoutchouc- und Gutta-Percha Compagnie. Continental Aktiengesellschaft was founded in 1871 and is headquartered in Hanover, Germany.

How the Company Makes Money

Continental makes money primarily through its diverse range of products and services across its major divisions. The Tire division generates revenue by manufacturing and selling a wide variety of tires for passenger cars, trucks, and industrial applications, serving both the original equipment and replacement markets. The Automotive Technologies division contributes to earnings by providing advanced safety features, powertrain technologies, and vehicle networking systems to automotive manufacturers. Additionally, the ContiTech division enhances revenue through its production of rubber and plastic products for a wide array of industries beyond automotive. The company's revenue streams are further bolstered by strategic partnerships and collaborations with other technology firms and automotive manufacturers, enabling innovation and market expansion.

Continental Aktiengesellschaft Financial Statement Overview

Summary

Continental Aktiengesellschaft exhibits stable profitability with a strong capital structure. The company manages its debt levels well, with a balanced debt-to-equity ratio and a robust operating cash flow to net income ratio. However, volatility in revenue and free cash flow presents some challenges.

Income Statement

Continental Aktiengesellschaft shows a stable gross profit margin around 22-23% in recent years. Net profit margin has improved significantly since 2020, reaching 2.9% in 2024. However, revenue has fluctuated, with a decline from 2023 to 2024. EBIT and EBITDA margins have remained modest, reflecting some operational challenges.

Balance Sheet

The company maintains a balanced debt-to-equity ratio of approximately 0.48 in 2024, indicating prudent leverage management. The equity ratio stands at 38.8%, suggesting a stable capital structure. Return on equity remains moderate at 8.1%, signaling stable returns for shareholders.

Cash Flow

Operating cash flow has been relatively consistent, but free cash flow has seen fluctuations, with a significant drop in 2024. The operating cash flow to net income ratio is robust at 2.51 for 2024, indicating strong cash generation relative to net income. However, free cash flow growth has been inconsistent.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	34.84B	39.72B	41.42B	39.41B	33.77B	37.72B
Gross Profit	8.15B	8.80B	8.81B	8.31B	7.74B	8.59B
EBITDA	4.55B	4.43B	4.21B	4.01B	4.11B	2.46B
Net Income	1.29B	1.17B	1.16B	112.20M	1.44B	-918.80M
Balance Sheet
Total Assets	37.36B	36.97B	37.75B	37.93B	35.84B	39.64B
Cash, Cash Equivalents and Short-Term Investments	1.74B	2.97B	2.92B	2.44B	2.00B	2.64B
Total Debt	0.00	6.91B	7.17B	7.67B	6.24B	7.32B
Total Liabilities	22.56B	22.17B	23.63B	24.19B	23.20B	27.00B
Stockholders Equity	14.37B	14.35B	13.68B	13.26B	12.19B	12.26B
Cash Flow
Free Cash Flow	1.90B	996.00M	1.18B	126.30M	1.08B	587.90M
Operating Cash Flow	3.67B	2.93B	3.33B	2.30B	2.95B	2.71B
Investing Cash Flow	-1.78B	-1.82B	-2.17B	-2.20B	-1.58B	-1.84B
Financing Cash Flow	-1.33B	-1.07B	-1.13B	653.50M	-1.16B	-1.14B

Continental Aktiengesellschaft Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 71.06
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:CON, the sentiment is Neutral. The current price of 71.06 is below the 20-day moving average (MA) of 75.68, below the 50-day MA of 72.79, and above the 200-day MA of 64.02, indicating a neutral trend. The MACD of -0.23 indicates Positive momentum. The RSI at 33.33 is Neutral, neither overbought nor oversold. The STOCH value of 7.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:CON.

Continental Aktiengesellschaft Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CON	74 Outperform	$14.20B	11.16	10.07%	3.52%	-14.83%	78.73%
Sector *	61 Neutral	AU$2.79B	25.61	5.01%	5.45%	2.63%	-29.95%
0MG5		€273.08M	―	-19.89%	2.98%	―	―
0R3U		€9.21B	29.64	10.12%	1.15%	―	―
0O4N		€719.95M	11.15	12.40%	4.62%	―	―
0RBK		€4.10B	21.23	-19.48%	4.95%	―	―
KBX	67 Neutral	€13.68B	32.07	13.95%	2.06%	-1.57%	-26.71%