Continental: Citi upgrades to 'buy'
(CercleFinance.com) - Citi has upgraded the Continental stock to "buy" with a target price of 141 euros, believing that the German auto parts maker has "material self-help opportunities" to improve its cash generation.
According to the broker, Conti's greater cost-focus could filter through to capex, where it sees material room for improvement.
From this viewpoint, the announced disposal of its 50% stake in SAS to Faurecia is likely the first of many disposals from the group.
In its note, Citi pointed out that European auto suppliers have rallied this year (+30% on average), while Conti's share (+0%) has been left on the sidelines.
However, the 10% discount relative to sector multiples is "unjust" in the broker's view.
The shares are currently up 1.7% at 119.8 euros in Frankfurt.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
According to the broker, Conti's greater cost-focus could filter through to capex, where it sees material room for improvement.
From this viewpoint, the announced disposal of its 50% stake in SAS to Faurecia is likely the first of many disposals from the group.
In its note, Citi pointed out that European auto suppliers have rallied this year (+30% on average), while Conti's share (+0%) has been left on the sidelines.
However, the 10% discount relative to sector multiples is "unjust" in the broker's view.
The shares are currently up 1.7% at 119.8 euros in Frankfurt.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.