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Continental Aktiengesellschaft
(XETRA:CON)
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Rating:62Neutral
Price Target:
€77.00
▲(8.60% Upside)
Action:Reiterated
Date:08/04/26
The score is anchored by solid cash generation and a constructive, albeit mixed, technical setup, while the earnings call adds meaningful upside through improved margin/FCF guidance and the signed ContiTech divestment with planned shareholder returns. Offsetting these positives are weakened current-period profitability (TTM net loss and thin EBIT margin) and valuation limitations signaled by a negative P/E, alongside near-term risks flagged in the call (volume softness and H2 raw-material headwinds).
Positive Factors
Free cash flow strength
Sustained positive free cash flow despite near-term earnings weakness provides durable financial flexibility. FCF funds capex, dividends/buybacks, and deleveraging plans without relying on equity issuance, and underpins the company’s ability to execute strategic moves over the next several quarters.
Negative Factors
Weak reported profitability
Thin operating margins and a TTM net loss mean earnings power is fragile; the company has limited cushion against cost shocks or demand declines. Persistent weak profitability undermines return on capital and makes achieving durable deleveraging and ROE recovery more challenging over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow strength
Sustained positive free cash flow despite near-term earnings weakness provides durable financial flexibility. FCF funds capex, dividends/buybacks, and deleveraging plans without relying on equity issuance, and underpins the company’s ability to execute strategic moves over the next several quarters.
Read all positive factors
Continental Aktiengesellschaft (CON) vs. iShares MSCI Germany ETF (EWG)
Market Cap
€14.37B
Dividend Yield3.76%
Average Volume (3M)604.04K
Price to Earnings (P/E)―
Beta (1Y)1.07
Revenue Growth-44.98%
EPS Growth-102.56%
CountryDE
Employees22,076
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)-0.17
Shares Outstanding200,005,980
10 Day Avg. Volume526,712
30 Day Avg. Volume604,041
Financial Highlights & Ratios
PEG Ratio0.72
Price to Book (P/B)3.46
Price to Sales (P/S)0.69
P/FCF Ratio12.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€79.43Price Target Upside12.03% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)5.99
Revenue Forecast (FY)€16.29B
Continental Aktiengesellschaft Business Overview & Revenue Model
Company Description
Continental AG is a global technology leader, specializing in advanced solutions for vehicles, industrial machinery, traffic systems, and transportation. The company operates through four distinct segments: Automotive, Tires, ContiTech, and Contra...
How the Company Makes Money
Continental makes money primarily by selling products and solutions to (1) automotive manufacturers (OEMs) and (2) the replacement/aftermarket, with additional revenues from associated services and software depending on the product line. A major r...
Continental Aktiengesellschaft 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 several material positive developments: a signed high-value divestment (ContiTech) with clear planned shareholder returns, stronger profitability and margins (notably in Tires), and a sizeable free cash flow improvement. These positives are tempered by ongoing volume weakness, regional replacement-demand caution, a forecasted raw-material cost headwind in H2 (low- to mid-triple-digit million euros), and a pro forma leverage of 2.0x that still needs reduction toward the 1x target. Management maintained a conservative stance on H2 but confirmed guidance for continuing operations and outlined a clear use of ContiTech proceeds. Overall, operational improvements and the strategic disposal materially outweigh the near-term challenges, though execution risks (raw materials, volumes, and deleveraging) remain.Positive Updates
ContiTech sale signed — large proceeds and shareholder returns planned
Signed sale of ContiTech to Lone Star for an enterprise value of EUR 4.0 billion plus up to EUR 250 million performance-based; expected net cash proceeds at closing ~EUR 3.1 billion. Plan to use ~EUR 2.5 billion for shareholder returns (special dividend and/or buybacks) and ~EUR 600 million for deleveraging, supporting target leverage below 1x by 2029.
Negative Updates
Reported group sales declined year-over-year
Group sales in Q2 were EUR 4.4 billion versus ~EUR 4.9 billion in Q2 prior year; reported decline mainly driven by prior-year disposals (sale of OESL/ContiTech OE-related business). Organically, sales were broadly stable at -0.3%.
Read all updates
Q2-2026 Updates
Positive
Negative
ContiTech sale signed — large proceeds and shareholder returns planned
Signed sale of ContiTech to Lone Star for an enterprise value of EUR 4.0 billion plus up to EUR 250 million performance-based; expected net cash proceeds at closing ~EUR 3.1 billion. Plan to use ~EUR 2.5 billion for shareholder returns (special dividend and/or buybacks) and ~EUR 600 million for deleveraging, supporting target leverage below 1x by 2029.
Read all positive updates
Company Guidance
Continental updated guidance for continuing operations with consolidated sales of around EUR 13.2–14.2 billion, an adjusted EBIT margin of ~12.0–13.5%, adjusted free cash flow of ~EUR 0.7–1.1 billion, CapEx of ~7–8% of sales, and special effects from continuing operations of about -EUR 200 million (PPA amortization no longer a material Tires KPI); management expects the Tires business to deliver the upper half of its profitability range while sales land around or slightly below the midpoint. Market assumptions remain cautious (volumes to stay below prior year, slightly lower global vehicle production driven by China, replacement demand now assumed slightly negative in Europe and North America; truck OE outlook firmer in Europe and slightly raised for North America but replacement there weaker). The signed ContiTech transaction carries an agreed enterprise value of EUR 4.0 billion plus up to EUR 250 million performance-related, expected net cash proceeds of ~EUR 3.1 billion (subject to approvals), with roughly EUR 2.5 billion earmarked for shareholder returns and ~EUR 600 million for deleveraging to support a mid‑term leverage target of below 1x by 2029 (Q2 net debt EUR 5.5 billion; pro‑forma leverage ~2.0x).Continental Aktiengesellschaft Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
58
Neutral
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.17B | 19.68B | 20.08B | 41.42B | 39.41B | 33.77B |
| Gross Profit | 5.12B | 5.11B | 5.30B | 8.81B | 7.58B | 7.74B |
| EBITDA | 1.95B | 1.91B | 3.23B | 4.21B | 4.01B | 4.29B |
| Net Income | -33.00M | -165.00M | 1.17B | 1.16B | 66.60M | 1.44B |
Balance Sheet | ||||||
| Total Assets | 17.48B | 17.79B | 36.97B | 37.75B | 37.93B | 35.84B |
| Cash, Cash Equivalents and Short-Term Investments | 1.50B | 1.57B | 2.97B | 2.92B | 2.44B | 2.00B |
| Total Debt | 6.61B | 6.83B | 7.21B | 7.17B | 7.67B | 6.24B |
| Total Liabilities | 12.88B | 13.63B | 22.17B | 23.63B | 24.19B | 23.20B |
| Stockholders Equity | 4.37B | 3.93B | 14.35B | 13.68B | 13.26B | 12.19B |
Cash Flow | ||||||
| Free Cash Flow | 1.31B | 1.12B | 996.00M | 1.18B | 126.30M | 1.08B |
| Operating Cash Flow | 2.37B | 2.19B | 2.93B | 3.33B | 2.30B | 2.95B |
| Investing Cash Flow | -1.35B | -1.42B | -1.82B | -2.17B | -2.20B | -1.58B |
| Financing Cash Flow | -600.00M | -135.00M | -1.07B | -1.13B | 653.50M | -1.16B |
Continental Aktiengesellschaft Technical Analysis
Negative
70.90
Price Trends
71.67
Negative
67.44
Positive
65.81
Positive
Market Momentum
-0.51
Positive
38.56
Neutral
24.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:CON, the sentiment is Negative. The current price of 70.9 is below the 20-day moving average (MA) of 71.32, below the 50-day MA of 71.67, and above the 200-day MA of 65.81, indicating a neutral trend. The MACD of -0.51 indicates Positive momentum. The RSI at 38.56 is Neutral, neither overbought nor oversold. The STOCH value of 24.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:CON.
Continental Aktiengesellschaft Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | €16.59B | 28.35 | 17.95% | 1.79% | 1.11% | 38.64% | |
70 Outperform | €978.25M | 16.71 | 11.98% | 3.11% | -4.59% | -8.81% | |
62 Neutral | €14.37B | -435.52 | -0.76% | 3.81% | -44.98% | -102.56% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
53 Neutral | €7.86B | 68.64 | 3.69% | 0.31% | -1.39% | -39.91% | |
50 Neutral | €306.66M | 65.58 | 0.83% | 3.11% | -6.42% | ― | |
43 Neutral | €6.70B | -15.20 | -14.78% | 3.76% | 16.50% | 57.62% |
* Consumer Cyclical Sector Average
DE:CON
Continental Aktiengesellschaft
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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.