Shares of luxury sports carmaker Aston Martin steadied on Thursday after unforeseen losses in the first quarter led to weakness. But, according to analysts, the long-term action plan remains intact.
Aston Martin shares first plunged 14% and then recouped some of that after Wednesday’s announcement, with adjusted pre-tax losses in the first quarter widening to £111 million ($139 million) from £57 million ($71 million) at the same time. last year. Sales fell 10% to £268 million ($335 million).
Shares lost 1. 7% on Thursday to close at £1. 36, according to Reuters. The stock hit £4 pounds last August.
Aston Martin said it expects functionality in the current quarter, with innovations in the second half of the year as deliveries of new products such as the flagship V12 sports car accelerate.
Aston Martin deliveries were hit by software issues, with deliveries falling 26% in the first quarter to 945. Deliveries of the best-selling DBX SUV fell to 250 while waiting for the long-awaited facelift.
“All the software problems are us,” President Lawrence Stroll said last month at a corporate event.
Aston Martin’s short- and medium-term guidance includes an increase in annual sales to 2. 5 billion pounds ($3. 1 billion) over four years and earnings before interest, taxes, depreciation and amortization (EBITDA) of 800 million pounds ($1 billion). Long-term sales target 17,000 sports cars and SUVs per year. In 2023, 6,620 cars were sold. The DBX accounts for almost a part of that.
British auto analyst Charles Tennant said that despite the worrying losses, the new style being developed includes an updated DBX.
Aston Martin DBX707 (Photo by John Keeble/Getty Images)
“This represents a quarter of the losses (which is worrying, almost double the forecasts) justified by Lawrence Stroll as ‘an expected transition period’ that looks like déjà vu as the transformation continues unabated,” Tennant said.
“What’s really worrying is that sales of its popular DBX SUV seem to have fallen by 63 per cent and I guess this may lead to a surge in racer shares, something Aston Martin probably wouldn’t like as it strives to move on to ‘But it’s not all bad news, as this year they launched 4 new models, adding an upgraded DBX SUV that can increase demand for their products,” Tennant said in an email. interchange.
Harry Martin, an analyst at Bernstein Research, said the buying case remained unchanged and agreed that the improved model lineup starting in the second half of this year would lead to higher average advertising prices and profit margins.
“The market will also have a very new CEO who will bring positivity in the second part of the year,” Martin said in a report.
Former Bentley executive Adrian Hallmark will join the organization as CEO in the fall.
Martin said the stock market’s harsh reaction is surprising, even though Aston Martin has what he called an “uneven track record of execution. “
“Key considerations come with the magnitude of the decline in demand for DBX, the explanation for why the backlog is still below 12 months, and when analysts call, liquidity considerations persist,” Martin said.
Chairman Stroll has been forced to capitalize several times since taking control of the company in 2020, attracting shareholders such as Saudi Arabia’s Public Investment Fund.
Martin said that in the coming months investors probably won’t want to hear about production delays and will want fake news about the progress of the loose cash flow.
Tennant said the arrival of a new CEO is positive news, while the delay announced in the past in the shift to electric is timely given the stagnation of electric vehicle markets.
“I think they have a crown jewel that will come later this year when former Bentley boss Adrian Hallmark takes over as CEO. Delaying production of battery-electric cars until 2026 while focusing on plug-in hybrids is a prudent move, as “We all know that global EV sales have plummeted, especially for premium cars,” Tennant said.
Aston Martin more than halved its loss for the year, to £171. 8 million before tax ($215 million), from £451 million ($564 million) in 2022.
The Aston Martin includes the road Vantage, the Vantage GT4 racer, the Valkyrie, the DB12, the DBS and the DBX.