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Investing.com - Citi has reiterated its Buy rating and €86.00 price target on Continental AG (ETR:CONG) (ETR:CON) (OTC:CTTAY), currently trading at $8.94 with a market capitalization of $17.61 billion. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations.
The firm opened a 90-day positive catalyst watch on Continental, expecting shares to re-rate closer to the target price as the Aumovio spin-off in September and OESL sale approach.
Citi described Continental’s second-quarter 2025 pre-close message as "reassuring," suggesting it de-risks shares over the summer period.
The research firm updated its model to reflect what it considers achievable CMD targets, noting that lower group guidance de-risks the second half of 2025 leading into the planned Aumovio spin-off.
Citi also updated its sum-of-the-parts analysis to better frame ContiTech valuations, indicating strategic and industrial buyers might view valuations of €4.0 billion or more as fair value for that division.
In other recent news, Continental AG’s stock rating was downgraded by Morgan Stanley (NYSE:MS) from overweight to equalweight. This change comes amidst concerns over higher tariff risks that could affect the company’s tire business, which have not yet been factored into Continental’s guidance. Despite the downgrade, Morgan Stanley increased its price target for Continental to EUR77.40 from EUR74.00. The firm also highlighted challenges in the North American truck replacement market as a headwind for Continental. The downgrade follows Continental’s progress in improving automotive margins through strategic measures and pricing discipline. Morgan Stanley noted that the company’s risk-reward profile has become less appealing after significant stock outperformance. Continental’s shares are currently evaluated at 13 times price-to-earnings and 12 times enterprise value to EBIT for 2025 estimates. Potential catalysts for the company include spin-off execution and possible technology disposals.
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