Picture supply: Getty Photographs
In the beginning of 2025, the Aston Martin (LSE:AML) share worth wasn’t in nice form at 106p. Now at 59p as we transfer in the direction of 2026, it’s in an entire mess.
This implies the FTSE 250 inventory is down 98% since early 2019!
But Rolls-Royce serves as a reminder of what can occur if an iconic British firm’s turnaround proves profitable. Shares of the FTSE 100 engine maker are up greater than 1,000% prior to now three years.
So, like James Bond limping out of a burning constructing, may the Aston Martin share worth additionally stage its personal unlikely escape?
What’s gone improper?
The record of challenges and issues on the luxurious carmaker may be very lengthy. These embody sluggish gross sales in China, provide chain disruptions, tariff complications, revenue warnings, and constant losses.
In Q3, income slumped 27% yr on yr to £285.2m, as wholesale volumes fell 13% to 1,430. Each different determine worsened, making this an alarming set of numbers to learn.
One vivid spot was that the primary deliveries of the Valhalla hyper-car began in October. This high-margin beast may give a monetary increase, assuming there aren’t any extra manufacturing delays. The DBX S and Vantage S are additionally on the roads.
Nevertheless, CEO Adrian Hallmark stated the longer term product cycle plan is now below overview. This can be executed with the intention of “optimising prices and capital funding while persevering with to ship progressive, class-leading merchandise to satisfy buyer calls for and regulatory necessities“.
Wanting on the stability sheet, this isn’t shocking. In September, web debt stood at a whopping £1.38bn. For context, that’s greater than double the corporate’s £595m market cap!
Earlier this month, credit standing company Fitch downgraded Aston Martin’s debt to CCC+. That places it deep into junk bond territory, highlighting the agency’s important monetary challenges.
Fitch stated Aston Martin carries extra debt and has the weakest free money circulation era of another carmaker it covers.
Ought to I take a punt on this FTSE 250 inventory?
Clearly, because of the steep losses, there’s no price-to-earnings ratio. And whereas a price-to-sales a number of of 0.43 appears to be like low, this doesn’t tempt me to take a position. Gross sales are declining, dragging the whole lot else down.
Besides Ferrari, whose order ebook stretches into 2027, luxurious carmakers are struggling. And there’s no signal issues are enhancing but.
Nonetheless, Government Chairman Lawrence Stroll stays bullish, saying that his “confidence within the long-term prospects for this iconic British model and dedication to the corporate stays unwavering”.
In my eyes, the more than likely consequence right here is that the enterprise can be taken non-public (the Monetary Occasions reported on this risk not too long ago). Nevertheless, whereas this might web a tidy revenue for these shopping for in the present day, it may not. And I don’t make investments hoping for acquisitions or takeovers.
I’ve checked out Aston Martin inventory half a dozen occasions over the previous 5 years. Every time, I get extra bearish, and none extra so than in the present day.
Sadly, whereas I’m an enormous fan of the model, automobiles and James Bond associations, shopping for the inventory at 59p would really feel extra like a dangerous gamble to me.
Subsequently, I feel there are far safer and higher choices elsewhere within the UK market proper now. And with 249 different mid-cap shares to discover, there’s definitely no scarcity of alternatives within the FTSE 250.
