Bernstein cuts Continental as stock reflects spin-off value

Continental AG

03/09/2025 08:10

** Bernstein downgrades car parts maker Continental CONG.DE to "underperform" from "market-perform," seeing little upside potential ahead of a spin-off of its automotive business

** The brokerage notes the German company is trading at the same multiple to tyre peers such as Michelin MICP.PA and Pirelli PIRC.MI, and the spinoff "value unlock" is fully in the stock price

** "We also see downside risk to promised margin expansion from structural headwinds, as well as another year of negative vehicle production in 2026" - Bernstein

** It values the remaining Continental company at 6.8x EBIT for a 16 billion euro EV and the automotive unit Aumovio at 5x EBIT for around 4.3 billion euro EV

** Out of 20 analysts covering the stock, nine rate it as "strong buy" or "buy," 10 rate it "hold" and one "strong sell" - LSEG data

 (Reporting by Paolo Laudani)

 ((Paolo.laudani@thomsonreuters.com))