Continental AG Shares (CON.DE) On Watch – Aumovio Spin-Off Sparks Optimism

Continental AG (shares CON.DE) are attracting renewed investor attention as the planned spin-off of its automotive division, Aumovio, draws closer.

Citi recently initiated a “90-day positive catalyst watch” on the stock, anticipating a re-rating as the September 2025 separation date approaches. The firm maintains a Buy rating and a price target of €86, signalling confidence in the strategic move's potential to unlock value.

However, this optimism is tempered by recent downward revisions to Continental's profitability targets, reflecting the challenges posed by adverse currency effects and escalating global trade barriers.

Continental's stock closed the last week of trading at €75.02, a gain of 1.52% on the week. Over the past year, Continental's shares have increased by 27%, reflecting the growing confidence in the company's long-term prospects.

The upcoming spin-off is a pivotal moment for Continental, representing the most extensive transformation in its 150-year history. Aumovio will emerge as an independent entity focused on advanced electronic products and mobility solutions, including software-defined vehicles and autonomous driving technologies.

Philipp von Hirschheydt, currently leading the Automotive group, will assume the role of CEO at Aumovio. The separation is designed to allow both Continental and Aumovio to pursue focused strategies and capitalize on their respective strengths. Post-restructuring, Continental will concentrate on its global tire business.

Citi's bullish stance is rooted in the belief that the spin-off will unlock hidden value within Continental's automotive division. By separating Aumovio, the market can more accurately assess its potential as a leading provider of cutting-edge automotive technology. This could lead to a higher valuation for Aumovio and, consequently, a higher overall valuation for Continental shareholders who will receive shares in the new entity.

However, there are some potential headwinds facing the firm. On June 24, 2025, the company revised its profitability targets for the year, citing adverse currency effects and rising trade barriers. The adjusted EBIT margin forecast for the tire segment was lowered to a range of 12.5% to 14%, while the group's overall adjusted EBIT margin forecast was reduced to between 10% and 11%.

These revisions reflect the impact of current U.S. import tariffs on the company's supply chain. Continental also confirmed its plans to sell the ContiTech division next year, further streamlining its operations.