One thing we could say about the analysts on Continental Aktiengesellschaft (ETR:CON) – they aren’t optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook – perhaps a sign that investors should temper their expectations as well.
After the downgrade, the consensus from Continental’s eight analysts is for revenues of €20b in 2025, which would reflect a concerning 50% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing €39b of revenue in 2025. The consensus view seems to have become more pessimistic on Continental, noting the pretty serious reduction to revenue estimates in this update.
Check out our latest analysis for Continental
The consensus price target fell 16% to €71.47, with the analysts clearly less optimistic about Continental’s valuation following this update.
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. We would highlight that sales are expected to reverse, with a forecast 75% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 2.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 5.8% annually for the foreseeable future. So it’s pretty clear that Continental’s revenues are expected to shrink faster than the wider industry.
The clear low-light was that analysts slashing their revenue forecasts for Continental this year. They’re also forecasting for revenues to shrink at a quicker rate than companies in the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Continental’s future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn’t be surprised if the market became a lot more cautious on Continental after today.
Worse, Continental is labouring under a substantial debt burden, which – if today’s forecasts prove accurate – the forecast downgrade could potentially exacerbate. See why we’re concerned about Continental’s balance sheet by visiting our risks dashboard for free on our platform here.
We also provide an overview of the Continental Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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