Narrow-moat Continental will recall a portion of the integrated braking systems it supplied to BMW, costing Continental a mid-double-digit million (euro) amount. We estimate the size of the warranty accrual to only hit Continental’s bottom line by approximately 3%. We therefore leave our fair value estimate of EUR 108 per share unchanged.
Continental is well positioned to capitalize on auto industry trends like safety, electronics, connectivity, and automated driving. As a result, we expect the company's revenue to average growth in excess of average annual growth in global light vehicle production.
The cyclical, capital-intensive nature of the automotive industry can cause companies to experience substantial swings in profitability.
|
Metric
|
CON
|
BWA
|
MGA
|
|---|---|---|---|
Price/Earnings (Normalized) | 9.83 | 8.50 | 7.73 |
Price/Book Value | 0.80 | 1.30 | 1.00 |
Price/Sales | 0.27 | 0.56 | 0.27 |
Price/Cash Flow | 3.85 | 5.31 | 4.21 |
|
Metric
|
CON
|
BWA
|
MGA
|
|---|---|---|---|
Quick Ratio | 0.68 | 1.19 | 0.74 |
Current Ratio | 1.20 | 1.62 | 1.12 |
Interest Coverage | 3.59 | 37.38 | 5.17 |
|
Metric
|
CON
|
BWA
|
MGA
|
|---|---|---|---|
Return on Assets (Normalized) | 2.47% | 6.40% | 4.68% |
Return on Equity (Normalized) | 6.79% | 15.25% | 13.02% |
Return on Invested Capital (Normalized) | 5.23% | 9.30% | 8.63% |
|
1-Day Chart
|
Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
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United States