Continental Aktiengesellschaft Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that Continental Aktiengesellschaft (ETR:CON) released its interim result to the market. The early response was not positive, with shares down 2.5% to €73.32 in the past week. Revenues were €19b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of €2.53 were also better than expected, beating analyst predictions by 12%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following last week's earnings report, Continental's twelve analysts are forecasting 2025 revenues to be €38.9b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 3.4% to €5.68. Yet prior to the latest earnings, the analysts had been anticipated revenues of €39.0b and earnings per share (EPS) of €5.83 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

View our latest analysis for Continental

It might be a surprise to learn that the consensus price target was broadly unchanged at €82.15, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Continental at €100.00 per share, while the most bearish prices it at €64.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.6% by the end of 2025. This indicates a significant reduction from annual growth of 2.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.2% per year. It's pretty clear that Continental's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Continental. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at €82.15, 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 estimates - from multiple Continental analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Continental is showing 2 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.