Download PDF

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on CON

Continental Aktiengesellschaft faces negative drivers, including analyst downgrades, which have impacted investor sentiment. The company's valuation has been questioned, with some investors reassessing its prospects. A 20% drop in a peer company's stock, Rémy Cointreau, may have contributed to market concerns. Additionally, Continental's competitors, such as Lenzing and D'Ieteren Group, have experienced choppy performances, potentially affecting industry sentiment. The company's growth attributes have been acknowledged, but recent earnings reports have not been cited as a positive factor. (Source: various news articles)

1.c. Company Highlights

2. Continental's Q3 2025 Earnings: A Mixed Bag

The company's Q3 2025 financial performance was marked by a significant decline in EPS, which came in at -3.78, relative to estimates of 1.35. Revenue growth was modest, with organic growth of 2.6%. The adjusted EBIT margin was stable at 14.3%, down from 14.6% in the previous quarter. The company's revenue was impacted by the sale of the Original Equipment Solutions business within ContiTech, which resulted in a write-down of assets and a negative impact of over EUR 1 billion.

Publication Date: Nov -14

📋 Highlights
  • ContiTech Industry Business Performance:: Improved margin of 8.5% in Q3 2025, up 0.5 percentage points YoY, progressing toward a midterm target of 11–13%.
  • Q3 Organic Growth:: Global organic sales growth of 2.6%, with Americas (5.1%) and APAC (3.2%) driving regional performance.
  • Noncash One-Off Impacts:: EUR 1 billion negative impact from the sale of Equipment Solutions business, reducing adjusted EBIT margin to 14.3%.
  • Equity Ratio Improvement:: Increased from 14.6% at end-June to 22.2% by Q3 2025, reflecting stronger balance sheet health.
  • CapEx Adjustment:: Guidance raised to 6.5% of sales from 6% due to ongoing plant expansions in Asia, notably China and Thailand.

Regional Performance

The regional performance was mixed, with strong organic sales growth in the Americas and APAC, achieving 5.1% and 3.2% growth, respectively. The ContiTech industry business showed a slight improvement, despite continuing weak volumes in the automotive and industry sectors. As Roland Welzbacher mentioned, "We've seen an improvement in the equity ratio from 14.6% at the end of June to 22.2% at the end of September, as expected in H1."

Cash Flow and Balance Sheet

The company's free cash flow generation operationally slightly improved compared to Q3 2024. However, the prior year was positively affected by a one-off effect from the reimbursement from Vitesco. The company's capital expenditures increased compared to the previous year, mainly due to investments in extension projects. The balance sheet was affected by the spin-off of AUMOVIO, with a negative impact on net debt.

Guidance and Outlook

The company is confident in achieving the lower end of the guidance corridor for ContiTech, with a healthy underlying performance and an expected sequential improvement in Q4. The company's cash flow guidance for the full year is expected to be met, despite the challenges faced in the market. S&P Global has raised expectations for light vehicle production in Europe and North America, which is a positive sign.

Valuation

Using the current valuation metrics, the company's P/E Ratio is 8.57, P/B Ratio is 2.52, and EV/EBITDA is 2.64. These metrics suggest that the company's stock is relatively undervalued, considering the challenges faced in the market. The Dividend Yield is 3.92%, which is attractive for income investors. The Net Debt / EBITDA ratio is -0.49, indicating a healthy debt position.

3. NewsRoom

Card image cap

Continental (XTRA:CON): Unpacking the Valuation Narrative Behind Recent Share Price Volatility

Nov -25

Source:

Card image cap

AI rivals like OpenAI, Nvidia, and Oracle are collaborating to build ‘Stargate’—but a Yale expert says it violates 135 years of antitrust law

Nov -23

Source:

Card image cap

Continental AG (CTTAF) Q3 2025 Earnings Call Highlights: Strong Organic Growth Amid Market ...

Nov -07

Source:

Card image cap

Continental expands Mexican footprint with new $90m Aguascalientes plant

Nov -05

Source:

Card image cap

Horrible News! GM's Best-Selling Equinox EV Just Got Recalled

Nov -02

Source:

Card image cap

Is Continental Still a Bargain After 49.9% Surge and Electric Mobility Partnership?

Oct -26

Source:

Card image cap

Continental Shares Climb After Strong Quarter, Outlook Confirmation

Oct -17

Source:

Card image cap

Germany’s Continental Backs 2025 Outlook, Reports Strong Start to Winter

Oct -16

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.77%)

6. Segments

Automotive

Expected Growth: 2.8%

Continental AG's 2.8% growth in the automotive segment is driven by increasing demand for advanced driver-assistance systems (ADAS), electrification, and autonomous driving technologies. Additionally, the company's focus on digitalization, connectivity, and software solutions is contributing to growth. Furthermore, the rising trend of vehicle electrification and the need for sustainable mobility solutions are also driving growth in this segment.

Tires

Expected Growth: 2.5%

Continental AG's 2.5% tire growth driven by increasing global vehicle production, rising demand for fuel-efficient and eco-friendly tires, and growing popularity of electric and hybrid vehicles. Additionally, expansion in emerging markets, particularly in Asia, and strategic partnerships with automakers contribute to the growth.

ContiTech

Expected Growth: 3.2%

ContiTech's 3.2% growth driven by increasing demand for fuel-efficient and low-emission vehicles, growing adoption of autonomous driving technologies, and expansion in emerging markets. Additionally, Continental's strategic investments in digitalization, electrification, and sustainability initiatives contribute to ContiTech's growth momentum.

Contract Manufacturing

Expected Growth: 2.9%

Continental Aktiengesellschaft's 2.9% growth in Contract Manufacturing is driven by increasing demand for automotive electronics, rising adoption of electric vehicles, and growing need for outsourcing manufacturing services. Additionally, the company's strategic partnerships, investments in digitalization, and expansion into emerging markets are contributing to its growth momentum.

7. Detailed Products

Tires

Continental's tire division offers a wide range of tires for passenger cars, trucks, buses, motorcycles, and bicycles, as well as specialty tires for agricultural, industrial, and off-the-road applications.

Automotive Systems and Technology

Continental's automotive systems and technology division develops and manufactures advanced driver assistance systems, autonomous driving technologies, and vehicle electronics.

ContiTech

Continental's ContiTech division offers a range of industrial and technical products, including conveyor belts, drive belts, and vibration control systems.

Interior Division

Continental's interior division develops and manufactures interior components and systems, including instrument clusters, infotainment systems, and interior electronics.

Powertrain Division

Continental's powertrain division develops and manufactures powertrain components and systems, including fuel injectors, engine management systems, and transmission control systems.

Chassis and Safety Division

Continental's chassis and safety division develops and manufactures chassis components and systems, including brake systems, suspension systems, and advanced driver assistance systems.

8. Continental Aktiengesellschaft's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Continental Aktiengesellschaft is moderate, as there are alternative products and services available in the market, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Continental Aktiengesellschaft is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Continental Aktiengesellschaft is moderate, as the company relies on a few key suppliers, but has some flexibility in its supply chain.

Threat Of New Entrants

The threat of new entrants for Continental Aktiengesellschaft is high, as the automotive industry is attractive and new companies are entering the market.

Intensity Of Rivalry

The intensity of rivalry for Continental Aktiengesellschaft is high, as the automotive industry is highly competitive and companies are constantly competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 34.40%
Debt Cost 8.01%
Equity Weight 65.60%
Equity Cost 11.59%
WACC 10.36%
Leverage 52.43%

11. Quality Control: Continental Aktiengesellschaft passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CIE Automotive

A-Score: 5.8/10

Value: 6.6

Growth: 5.4

Quality: 2.6

Yield: 6.2

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Autoliv

A-Score: 5.7/10

Value: 5.4

Growth: 5.7

Quality: 5.2

Yield: 6.2

Momentum: 6.5

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
HELLA

A-Score: 4.8/10

Value: 3.6

Growth: 5.7

Quality: 4.6

Yield: 2.5

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Continental

A-Score: 4.7/10

Value: 7.7

Growth: 3.3

Quality: 4.6

Yield: 5.6

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

View Full Report
Stock-Card
Knorr-Bremse

A-Score: 4.5/10

Value: 3.8

Growth: 3.4

Quality: 5.2

Yield: 3.8

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Forvia

A-Score: 4.1/10

Value: 9.6

Growth: 3.2

Quality: 1.5

Yield: 1.2

Momentum: 8.0

Volatility: 1.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

65.36$

Current Price

65.36$

Potential

-0.00%

Expected Cash-Flows