Street Calls of the Week
Investing.com -- Continental held its regular pre-close call for the third quarter on Wednesday evening, ahead of results due on November 6.
The automotive parts supplier said it expects a “high double-digit million-euro” impact from U.S. tariffs in the second half of 2025, noting this already accounts for a retroactive reduction to 15% as of August.
It also said that order books for the winter season look encouraging.
For its tyre division, sales in the third quarter are set to remain broadly flat year-on-year, with margins trending toward the lower end of full-year guidance.
Continental reaffirmed that for 2025, the unit’s adjusted operating margin should land between 12.5% and 14.0%.
Thomas Besson, analyst at Kepler Cheuvreux, said that it seems that September “developed better than expected overall for Tyres, where volumes and price mix should support sequentially higher margins.”
He expects volumes to rise in the fourth quarter and profitability for the full year to be “comfortably within the target range.”
Besson noted that the third-quarter backdrop “remained tough overall as forex headwinds accelerated slightly sequentially, industrial activity remained subdued overall and softer in the U.S., and the tariffs situation remained fluctuant.”
On the other hand, the anticipated rebound in industrial activity at ContiTech has been slower to materialise, weighing on third-quarter revenues and margins.
Besson said that “a seasonally stronger Q4” could still allow the division to reach the low end of its margin range for the year
Kepler reiterated its Buy rating and €70 target price on Continental, one of its preferred names in autos, alongside CIE, Ferrari, and Michelin.