Tyre makers better equipped to weather Middle East shocks, Barclays says

Continental AG

14/04/2026 09:29

** Barclays says tyre makers are better equipped to withstand disruptions from the conflict in the Middle East, whose damage can "no longer be ignored" for the European auto parts sector

** The broker upgrades Continental CONG.DE to "overweight" from "equal-weight" and Michelin MICP.PA to "equal-weight" from "underweight" as tyre makers can weather the shock with pass‑through clauses and solid pricing power in replacement markets

** The industry is more prepared and resilient, but renewed input cost inflation and rising macro and consumer confidence risks worsens an already fragile operating framework, the broker says

** The "unwelcome shock" adds margin pressures and substantial working-capital-related downside risks to short-term cash generation, it notes

** It reiterates "overweight" rating on Aumovio AMV0n.DE and Forvia FRVIA.PA, for which it sees more corporate actions in 2026 to drive shareholder returns

(Reporting by Emanuele Berro)

((emanuele.berro@thomsonreuters.com))