Analysts: Continental ‘can still surprise’

Some financial analysts have stated their faith in Continental AG’s continuing strong financial performance ahead of the company’s third quarter results.

Upgrading their estimates for the company’s shares performance, Morgan Stanley market watchers said they predict “10 per cent upside to 2012 consensus and circa 20 per cent in 2013-2014,” continuing: “We think valuation and third quarter catalyst make Continental the most attractive investment in the auto industry.”

While, Conti’s automotive segment is seen as something of a drive, the analysts also predict that the subdued tyre market environment gives the company “another chance to surprise.”

According to the analysts, feedback from Conti’s CFO offers confidence that the company can beat consensus predictions in the second half of 2012. This is said to be due to “below-industry inventory levels in a tough winter tyre market.” As a result forecasts for winter tyre volumes are said to be up “slightly” year-on-year as opposed to “slightly down before. 

Margin is expected to peak in 2012 at more than 17 per cent.