Continental shares climbed 9% on Thursday morning on the Frankfurt stock exchange, with investors hailing the company's positive outlook for the automotive sector at a meeting with analysts yesterday.

During a conference call held on Wednesday evening to mark the end of the second quarter, the German automotive supplier delivered, according to professionals, optimistic comments.

While most investors feared a new warning from the group after its poor start to the year, and in a sector context that remains difficult in the automotive sector, it was in the end a surprisingly much more positive message that was delivered yesterday concerning automotive activity", summarize Oddo BHF's analysts.

The private bank's teams explained that Conti had surprised many in the automotive sector by indicating that it would be able to come close to operating breakeven for the first half of the year, whereas the financial community had understood that this was only a target for the second quarter.

We feel that Continental made significant progress in controlling its automotive prices in the second quarter", explain Stifel's analysts.

They now expect the automotive division to report adjusted operating profit (Ebit) of €174 million for the second quarter, compared with the current consensus of €16 million.

While yesterday's announcement is undeniably a welcome surprise, it nevertheless raises questions about the lack of visibility and volatility of the equipment manufacturer's results", comments a cautious Oddo, who maintains its 'underperform' rating on the stock.

Deutsche Bank takes the same view, stating that "while automotive margins developed favorably in the second quarter, this was not the case for the first half as a whole, which means that the division's targets for fiscal 2024 are still too ambitious".

With gains of around 9%, Continental shares were still by far the biggest risers on the DAX index on Thursday morning on the Frankfurt Stock Exchange.

Continental is due to publish its second-quarter results on August 7.

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