Continental 1Q: “Buy” but work to do to hit guidance – analysts

Rating Continental shares as “buy” financial analysts at Jefferies responded to Continental AG’s first quarter 2024 financial results by noting that Conti has “a lot of work to do in the remaining three quarters” to reach its projected results. Continental AG’s first quarter sales 2024 were -5 per cent year-on-year and margins are “in line with pre-released numbers”. Nevertheless, the analysts also highlighted that there is “some positive commentary on replacement tyre volumes in April and minor revisions to commercial vehicle production in the US (positive) and Europe (negative)”.

As far as earnings are concerned, first quarter sales came in at €9,788 million (compared with €9.8 billion pre-release) and an operating result of €197 million (a 2 per cent margin versus 2 per cent pre-release). The tyres segment delivered the vast majority of these (€386 million; 11.7 per cent margin versus 11.7 per cent pre-release), offsetting losses within the Automotive division.

Moving forward, Conti executives expect to improve the arguably strong margin position of its Tyres to 13-14 per cent from 11.7 per cent in the first quarter. Market guidance was unchanged in relation to passenger cars but revised higher for commercial vehicle production in North America (-1 to +1 per cent from -4 to -6 per cent) and lower in Europe (-8 to -10 per cent from -7 to -9 per cent).