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Continental (Baa2/BBB): 4Q23 Preview

CONSUMER CYCLICALS
  • Tyre producers Michelin, Pirelli (both largely in line) and Goodyear (missed) have already reported results for last quarter.
  • Consensus sees revenue growing +4%, adj. operating income up +73%. FY adj. EBITDA growth of +16% to €4.605bn is expected.
  • Net debt and leverage should step lower YoY. At 3Q, management targeted €0.8 to 1.2bn FY adj. FCF.
  • Spreads have rallied ~15bp YTD, in line with the market. The curve trades inside comps, leaving limited room for upside.

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