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Investing.com - Deutsche Bank upgraded Continental AG (ETR:CON) stock rating from Hold to Buy on Friday, raising its price target to EUR65.00 from EUR63.00 following the company’s better-than-expected third-quarter performance. The automotive components giant, with a market capitalization of $13.7 billion and trailing twelve-month revenue of $46.6 billion, is currently trading below its InvestingPro Fair Value.
Continental pre-released Q3 2025 results that exceeded expectations in both earnings and cash flow, with the analyst noting that the earnings beat came from both the Tires and ContiTech divisions, with Tires being the primary contributor to the positive surprise. The company maintains strong profitability metrics, with a P/E ratio of 10.7 and healthy EBITDA of $4.58 billion.
Deutsche Bank highlighted strong price/mix performance in the Tires segment during Q3 2025, with momentum expected to continue into the fourth quarter despite starting from a higher base, adding that this positive development could also benefit competitor Pirelli.
The bank views Continental’s recent stock selloff following Michelin’s warning as creating an attractive entry point, with the positive pre-release serving as a potential upside catalyst for the stock.
Deutsche Bank identified additional upcoming catalysts for Continental, including a potentially strong finish to the year in the Tires division and anticipated news regarding the ContiTech disposal, which is expected to be announced sometime in the first half of 2026.
In other recent news, Bernstein has downgraded Continental AG from Market Perform to Underperform. This change comes in anticipation of the company’s upcoming spinoff of its automotive unit, Aumovio, which is set to be finalized on September 18, 2025. The spinoff will result in Continental becoming a more focused tire and rubber industrial goods business. Despite the downgrade, Bernstein has slightly raised its price target for Continental to EUR66.00 from EUR64.00. These developments mark a significant shift in Continental’s business strategy. The analyst firm’s decision reflects its current view on the company’s future prospects following the spinoff. Investors are closely watching how these changes will impact Continental’s operations and market position.
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