Last week saw the newest annual earnings release from Continental Aktiengesellschaft (ETR:CON), an important milestone in the company’s journey to build a stronger business. Revenues of €40b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at €5.84, missing estimates by 9.0%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Continental
Following last week’s earnings report, Continental’s 17 analysts are forecasting 2025 revenues to be €40.1b, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 20% to €7.03. Before this earnings report, the analysts had been forecasting revenues of €41.1b and earnings per share (EPS) of €8.52 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
The analysts made no major changes to their price target of €77.11, suggesting the downgrades are not expected to have a long-term impact on Continental’s valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Continental, with the most bullish analyst valuing it at €93.00 and the most bearish at €59.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It’s pretty clear that there is an expectation that Continental’s revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 2.5% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Continental is also expected to grow slower than other industry participants.
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Continental. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €77.11, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Continental. Long-term earnings power is much more important than next year’s profits. We have forecasts for Continental going out to 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Continental that we have uncovered.
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