(Sharecast News) - Continental shares jumped on Friday after the German auto parts group topped analysts' forecasts with its third-quarter results, prompting Deutsche Bank to upgrade its rating on the stock.
The company, which makes everything from tyres to brake systems and infotainment solutions, reaffirmed its full-year outlook on Thursday, which will have reassured investors after French peer Michelin downgraded its guidance earlier in the week, owing to weakness in North America.

Continental expects sales for the third quarter to come in at €5.0bn, ahead of the company-compiled consensus at €4.9bn. while the adjusted EBIT margin should be 11.4%, comfortably above the 9.5% estimate.

Sales in the larger tyres division were in line with forecasts at €3.5bn, but the adjusted EBIT margin of 14.3% was ahead of the 13.0% forecast due to a "very positive" price/mix, which almost completely offset the negative impact of lower volumes, exchange rate movements and tariffs.

"The strong start of the winter tire business and lower fixed costs in particular contributed to the positive earnings deviation from the analyst consensus," the company said.

As a result of the strong update, Deutsche Bank lifted its recommendation on the stock from 'hold' to 'buy', raising its target price from €63 to €65.

The stock was 9.1% higher at €59.60.

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