Stock Analyst Note
Continental: Recall of Braking System to Have Limited Impact on Bottom Line; Fair Value Unchanged
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.