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Investing.com - BofA Securities lowered its price target on Continental AG (ETR:CON) (OTC:CTTAY) to EUR73.00 from EUR97.00 while maintaining a Buy rating following the company’s Aumovio spin-off completed on September 18, 2025.
The German automotive manufacturing company now consists solely of its Tires and ContiTech businesses, with Tires expected to represent approximately 70% of sales and 90% of adjusted EBIT in 2025, according to BofA Securities.
Continental’s passenger car tires business generates about 50% of its revenues from ultra-high-performance tires (larger than 18 inches), which produce up to six times higher EBIT than standard tires. BofA Securities notes that increasing electric vehicle adoption will likely drive further growth in this segment, creating a positive price/mix effect of 2-3% annually in coming years.
The firm projects Continental can approach a 16% adjusted EBIT margin by 2027, up from an estimated 12.7% in fiscal year 2025, reflecting the company’s less cyclical business profile following the spin-off.
Continental completed the disposal of its OESL business in August 2025, which BofA Securities estimates at approximately EUR500 million in enterprise value, and expects to complete the disposal of its remaining ContiTech business during fiscal year 2026 with anticipated proceeds exceeding EUR5 billion.
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