Analyst Alexander Wahl of Stifel Nicolaus maintained a Buy rating on Continental Aktiengesellschaft (CTTAF – Research Report), with a price target of €86.00.
Alexander Wahl has given his Buy rating due to a combination of factors related to Continental Aktiengesellschaft’s (CTTAF) financial outlook and market position. Wahl’s analysis considers the company’s guidance for FY24, which aligns with expectations, particularly in the Automotive sector where adjusted EBIT margin projections suggest a 13.5% upside compared to the Auto consensus. Despite a moderate group guidance presenting a slight downside, the potential in the Automotive division appears to be a strong contributing factor to the positive outlook.
Further reinforcing the Buy rating, Wahl notes the company’s solid free cash flow (FCF) performance and its expectations for the upcoming year, excluding one-off expenditures related to restructuring and share repurchases. Although the forecasted FCF for FY24 is lower than the previous year, if adjusted for these one-time effects, the FCF could approach €2 billion. The combination of a robust margin outlook in key sectors and a strong underlying FCF capability, even amidst significant one-off costs, suggests a favorable financial trajectory for Continental Aktiengesellschaft, justifying Wahl’s Buy recommendation.
In another report released today, J.P. Morgan also maintained a Buy rating on the stock with a €100.00 price target.
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Continental Aktiengesellschaft (CTTAF) Company Description:
Continental AG is a holding company, which engages in the manufacture and sale of soft rubber products, rubberized fabrics, and solid tires. It operates through the following segments: Chassis and Safety, Powertrain, Interior, Tires, ContiTech, and Other or Consolidation. The Chassis and Safety segment develops, produces, and markets intelligent systems to improve driving safety and vehicle dynamics. The Powertrains segment integrates system solutions for the powertrains. The Interior segment provides information management for vehicles; and develops and produces communication, and network solutions. The Tires segment offers reduction of fuel consumption by minimizing rolling resistance. The ContiTech segment covers the development, manufacture, and market of products for the machine and plant engineering, mining, and automotive industry. The Other or Consolidation segment represents the centrally managed subsidiaries and affiliates including holding, financing, and insurance companies. The company was founded on October 8, 1871 and is headquartered in Hanover, Germany.
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