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Continental AG - Stock Quote CON

Rating as of

Morningstar's Continental AG Stock Analysis

Valuation
Currency in EUR
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Several Headwinds Hit Continental Q1 Results, Reduces 2022 Profit Guidance; EUR 143 FVE Unchanged

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

Narrow-moat-rated Continental reported first-quarter earnings per share of EUR 1.23, beating the EUR 1.15 EPS FactSet consensus by EUR 0.08 but down EUR 1.00 from the EUR 2.23 EPS reported a year ago. Consolidated revenue beat consensus by 3%, increasing 8% to EUR 9.3 billion from EUR 8.6 billion last year. Automotive group organic revenue slipped 1.2%, outperforming a 4.5% global light vehicle production decline by 330 basis points thanks to new business. Tire group organic revenue jumped 17.4% on strong volume and pricing, while ContiTech organic revenue increased 3.6% on non-automotive pricing and volume growth. Our fair value estimate remains EUR 143. The 5-star-rated shares of Continental currently trade at a compelling 55% discount to our fair value.

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Continental AG's Company Profile

Business Description

Continental is a global auto supplier and tiremaker. Operating segments include the autonomous mobility and safety segment and the vehicle networking and information segment in the automotive group, plus tires and ContiTech, which uses rubber in industrial and automotive components and systems, in the rubber group. Last year, pro forma for the spinoff of Vitesco, automotive group revenue was around 45% (AMS 22%, VNI 23%) of the total, rubber group revenue was 52% (tires 35%, CT 17%), and contract manufacturing for Vitesco was 3%. Top five customers include Mercedes-Benz, Ford, the Renault-Nissan-Mitsubishi alliance, Stellantis, and Volkswagen, representing about 33% of total revenue. Europe, at 48% of total revenue, is the companies largest market, followed by North America at 26%.

Contact
Vahrenwalder Strasse 9
Hanover, 30165, Germany
T +49 51193801
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type
Employees 194,947