Continental: Oddo BHF still cautious, says sell

(CercleFinance.com) - Oddo BHF maintains its 'underperform' rating on Continental shares, with an unchanged target price of E60, believing that doubts are far from being dispelled and that the auto business remains unconvincing.


The analyst says that Continental's publication first confirms all the doubts surrounding the outlook for the automotive business and management's ability to turn the situation around quickly.

Although Continental has once again raised the prospect of a spin-off by the end of the year (after a dedicated CMD this summer), Oddo BHF believes it is still premature to consider the operation as value-creating.

The broker also says that it is cautious about the ability of this business to develop independently from a financial point of view, despite the promise of a 'solid' initial financial situation (net cash).

While the momentum of the other businesses seems more reassuring, the weakness of the Automotive business and the lack of visibility as to its
real recovery in the current environment lead us to maintain our caution on the share, Oddo BHF concludes.


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