Continental Aktiengesellschaft Just Missed EPS By 23%: Here's What Analysts Think Will Happen Next

Investors in Continental Aktiengesellschaft (ETR:CON) had a good week, as its shares rose 9.0% to close at €58.66 following the release of its half-year results. Statutory earnings per share fell badly short of expectations, coming in at €1.26, some 23% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €20b. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Continental

Taking into account the latest results, Continental's 18 analysts currently expect revenues in 2024 to be €41.1b, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 53% to €6.27. In the lead-up to this report, the analysts had been modelling revenues of €41.4b and earnings per share (EPS) of €6.54 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at €75.44, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Continental at €108 per share, while the most bearish prices it at €54.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Continental's growth to accelerate, with the forecast 2.9% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 5.8% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Continental is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Continental's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Continental going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Continental that you need to take into consideration.

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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.