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Continental Aktiengesellschaft (DE:CON)
XETRA:CON
RESEARCH TOOLSreports
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Continental Aktiengesellschaft
(XETRA:CON)
61Neutral
Positive Factors
Restructuring and Cost Savings
CON has upped its cost savings target from over €150m previously to around €200m.
Tires Segment Performance
Tire volumes increased 2.0% yoy on the back of good replacement demand for passenger car tires, leading to a strong Q3 EBIT adj. margin of 14.5% well ahead of the market estimates.
Negative Factors
Automotive Segment Margins
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%.
Cash Flow and Restructuring Costs
CON sees FY25 FCF of €0.8-1.2bn vs VA consensus at €1.5bn, which we estimate includes a 2025 restructuring cash-out of €300-350m.
ContiTech Performance
Very low volumes in the industrial business at ContiTech added to the negative market environment in the automotive business.
Continental Aktiengesellschaft (CON) vs. S&P 500 (SPY)
Market Cap
$14.86B
Dividend Yield3.17%
Average Volume (3M)489.56K
Price to Earnings (P/E)11.5
Beta (1Y)1.16
Revenue Growth-14.83%
EPS Growth78.73%
CountryDE
Employees96,426
SectorConsumer Cyclical
Sector Strength67
IndustryAuto - Parts
Share Statistics
EPS (TTM)1.06
Shares Outstanding200,005,980
10 Day Avg. Volume465,405
30 Day Avg. Volume489,563
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)1.01
Price to Sales (P/S)0.00
P/FCF Ratio14.81
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$81.00Price Target Upside7.17% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Continental Aktiengesellschaft Business Overview & Revenue Model
Company DescriptionContinental Aktiengesellschaft (CON), commonly known as Continental, is a leading German automotive manufacturing company specializing in the production of tires, automotive components, and other related technologies. The company operates in several key sectors, including tires, automotive technologies, and ContiTech, which focuses on rubber and plastics technology. Continental is renowned for its innovative solutions in vehicle safety, efficiency, and connectivity, making it a significant player in the global automotive industry.
How the Company Makes MoneyContinental 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 and a strong capital structure. The company effectively manages its debt levels, maintaining a balanced debt-to-equity ratio. However, there are some challenges, such as revenue fluctuations and inconsistent free cash flow growth. Despite these, the company maintains a sound financial position with steady cash generation.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.68
Positive
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.74
Positive
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.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 39.72B | 41.42B | 39.41B | 33.77B | 37.72B | Gross Profit |
| 8.80B | 8.81B | 8.31B | 7.74B | 8.59B | EBIT |
| 852.00M | 799.60M | 1.33B | 1.79B | -317.60M | EBITDA |
| 4.43B | 4.26B | 4.01B | 4.11B | 2.46B | Net Income Common Stockholders |
| 1.17B | 1.16B | 112.20M | 1.44B | -918.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.72B | 2.92B | 2.44B | 2.00B | 2.64B | Total Assets |
| 36.97B | 37.75B | 37.93B | 35.84B | 39.64B | Total Debt |
| 6.91B | 7.17B | 7.67B | 6.24B | 7.32B | Net Debt |
| 3.94B | 4.25B | 5.23B | 4.24B | 4.68B | Total Liabilities |
| 22.17B | 23.63B | 24.19B | 23.20B | 27.00B | Stockholders Equity |
| 14.35B | 13.68B | 13.26B | 12.19B | 12.26B |
| Cash Flow | Free Cash Flow | |||
| 996.00M | 1.18B | 126.30M | 1.08B | 587.90M | Operating Cash Flow |
| 2.93B | 3.33B | 2.30B | 2.95B | 2.71B | Investing Cash Flow |
| -1.82B | -2.17B | -2.20B | -1.58B | -1.84B | Financing Cash Flow |
| -1.07B | -1.13B | 653.50M | -1.16B | -1.14B |
Continental Aktiengesellschaft Technical Analysis
Positive
75.58
Price Trends
65.68
Positive
65.08
Positive
61.02
Positive
Market Momentum
2.77
Negative
75.51
Negative
90.28
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:CON, the sentiment is Positive. The current price of 75.58 is above the 20-day moving average (MA) of 67.47, above the 50-day MA of 65.68, and above the 200-day MA of 61.02, indicating a bullish trend. The MACD of 2.77 indicates Negative momentum. The RSI at 75.51 is Negative, neither overbought nor oversold. The STOCH value of 90.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:CON.
Continental Aktiengesellschaft Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $50.49B | 7.75 | 7.02% | 7.13% | -10.13% | -37.28% | |
75 Outperform | $213.91B | 32.98 | 17.20% | 1.25% | 0.78% | 6.75% | |
75 Outperform | €173.67B | 18.16 | 14.18% | 2.32% | -1.13% | 8.98% | |
73 Outperform | €51.43B | 5.46 | 5.52% | 8.96% | 1.62% | -38.38% | |
61 Neutral | $6.93B | 11.84 | 2.89% | 3.91% | 2.59% | -21.68% | |
61 Neutral | $14.86B | 11.53 | 10.07% | 3.17% | -14.83% | 78.73% | |
59 Neutral | €39.83B | 53.90 | 2.02% | 7.58% | -2.04% | 2258.97% |
* Consumer Cyclical Sector Average
Performance Comparison
DE:CON
Continental Aktiengesellschaft
75.58
15.22
25.22%
LIN
Linde
450.67
25.20
5.92%
DE:BAS
BASF SE
45.29
-1.83
-3.89%
DE:BMW
Bayerische Motoren Werke Aktiengesellschaft
83.98
-12.92
-13.33%
DE:VOW3
Volkswagen
104.95
-7.16
-6.39%
DE:SIE
Siemens
225.15
41.74
22.76%
Continental Aktiengesellschaft Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q3-2024)
| % Change Since: 7.82%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
Continental AG's Q3 2024 earnings call highlights several positive developments such as improved EBIT margins, successful pricing negotiations, and strong performance in the tire segment. However, these are balanced by significant challenges including weak industrial markets impacting ContiTech, reduced order intake, and persistent challenges in the automotive segment, particularly in North America. The overall sentiment remains cautious but demonstrates resilience in the face of market difficulties.Q3-2024 Updates
Positive Updates
Improvement in Adjusted EBIT Margin
Continental AG reported a significant improvement in its adjusted EBIT margin by 260 basis points year-over-year, driven by strategies including a €125 million cash inflow from Vitesco Technologies.
Successful Pricing Negotiations in Automotive
The automotive team concluded nearly all pricing negotiations, which contributed to a 140 basis point improvement in adjusted EBIT margin despite the challenging market.
Tire Segment Growth
The tire segment showed a strong performance with 3.5% organic sales growth and a 120 basis point increase in adjusted EBIT margin, driven by improvements in passenger vehicle replacement and truck tire business.
Cost Savings and Efficiency Gains
Continental achieved €100 million in cost savings year-to-date and raised the cost-cutting target to €200 million by year-end 2024, with further savings assured for 2025.
R&D Efficiency Improvements
A 30 basis point reduction in R&D to sales percentage was achieved, with AI being used to cut development time by up to 20%.
Negative Updates
Weak Industrial Markets Impacting ContiTech
ContiTech was heavily burdened by persistently weak industrial markets, resulting in a downgrade of its sales and EBIT margin guidance.
Automotive Market Challenges
Continental faced weak global production volumes, which impacted the automotive segment's sales and led to an expectation of landing in the lower half of the adjusted EBIT margin guidance.
Lower Free Cash Flow
Operating cash flow was down due to higher working capital and lower cash inflow from weak sales in July and August.
Weak Order Intake in Automotive
Automotive's order intake was below expectations at €3.7 billion, reflecting the challenging market environment with delayed sourcing decisions from customers.
Challenges in North America
The automotive segment in North America faced persistent challenges, including customer mix and technology change cycles, affecting performance.
Company Guidance
During the Q3 2024 call, Continental AG provided several key metrics and updates on their strategic and financial performance. The company reported a significant improvement in the adjusted EBIT margin, which increased by 260 basis points year-over-year, aided partially by a €125 million cash inflow from Vitesco Technologies. Group sector highlights included a notable organic sales growth of 3.5% in tires and a 140 basis points improvement in the automotive sector's adjusted EBIT margin. However, ContiTech faced challenges due to weak industrial markets, prompting a revised sales outlook to €6.2 billion to €6.6 billion and an adjusted EBIT margin of 5.8% to 6.3%. The company also highlighted a substantial reduction in headcount, contributing to a targeted €200 million cost savings for 2024, with plans to achieve an additional €200 million in 2025. Despite challenges, Continental reaffirmed its commitment to achieving its full-year guidance, adjusting the overall group sales outlook to €39.5 billion to €42 billion.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.