SHARE IN FOCUS: Continental increase despite reduced annual targets

FRANKFURT (dpa-AFX) – Despite Continental’s lower target for profitability this year, the stock market has reacted positively to the preliminary quarterly figures and the new outlook. With a price increase of 4.2 percent, the share certificates were the second-biggest winner in the rising leading index Dax (DAX 40), surpassed only by Sartorius (Sartorius vz).

The automotive supplier is preparing for a difficult year due to the economic turmoil caused by the war in Ukraine and the increased cost of raw materials. The group lowered the forecast for adjusted earnings before interest and taxes to a margin of 4.7 to 5.7 percent of expected sales in 2022. Conti had previously expected 5.5 to 6.5 percent.

In view of the economic environment, investors would have expected a greater setback for business, it was said in the trade. The key data for the first quarter were also better than expected.

Analyst Jose Asumendi from the investment bank JPMorgan highlighted Continental’s good performance in the tire business. This made up for the weakness in the car segment. The latter also met market expectations. Despite the lowered targets for the year as a whole, market expectations will probably not change much. It now depends on the progress in the coming quarters, especially on evidence of a recovery in global auto production in the second half of the year.

Continental has lost a good quarter of its market value since the beginning of the year, making it one of the biggest losers in the Dax. In early March, stocks fell to their lowest level in almost two years because of Russia’s invasion of Ukraine. In the short term, the stock could now rise above the average line for the past 50 trading days. This is considered an indicator of the medium-term trend. Stocks last traded above this trend line in mid-February./bek/men/jha/