The Aston Martin (LSE: AML) share price should come with parachute as standard. It’s plunged 60% in a year and 90% over five years.
The shares have been hurtling to earth ever since floating at £19 in October 2018. Today, they cost just 70p. That’s a loss of more than 96%.
Few companies have a rockier history. Aston Martin went bust seven times after being founded in 1913. The latest incarnation has only been kept on the road by emergency fundraising rounds and cash injections from billionaire Lawrence Stroll.
He’s now pumped in around £600m since taking control in 2020, and he’s not stopping.
Can this FTSE 250 stock fight back?
On 31 March, we learned his Yew Tree Consortium is injecting another £52.5m, snapping up 75m shares to lift its stake from 27.7% to 33%. Good luck with that.
Aston Martin is also selling its minority stake in the Aston Martin Aramco Formula One team to shore up its battered balance sheet.
Now the James Bond car maker has Donald Trump’s tariffs to contend with. A third of group revenues come from the US but yesterday’s 10% tariff slapped on British imports was lower than feared.
Aston Martin shares are down just over 2% today. That’s neither here nor there, by its volatile standards. This remains an extremely high-risk investment. The latest financials underline the challenge. Losses accelerated to £289.1m in 2024 from £239.8m a year earlier. Revenue dipped 3% to £1.58bn, while wholesale volumes slumped 9% to 6,030 cars.
Management is fighting back by axing 170 jobs, around 5% of its global workforce. It’s also rowing back on its planned electric vehicle launch. Publicly, it’s aiming for “the latter part of the decade” but given the net zero backlash I wouldn’t be surprised if it quietly parked this venture.
Despite the turmoil, there are flickers of hope. CEO Adrian Hallmark insists the luxury marque is poised for a big turnaround, with positive adjusted earnings and free cash flow in the second half of this year. That would be something.
To Valhalla and back
The upcoming Valhalla hybrid supercar could inject some life, with deliveries starting next year.
Analysts are optimistic. The eight experts making Aston Martin share price forecasts have a median target of just under 105p. If they’re right, that’s a rocket-fuelled increase of exactly 50% from today.
Which would be explosive if it happens, but wouldn’t quite cover my losses on the stock after throwing caution to the wind and buying it last year in a (thankfully rare) moment of madness.
I won’t be buying more. The ride has been far too wild for my liking, and even if the shares do start to perform, I can’t imagine it will be a smooth road to recovery.
Markets could decide the sell-off has gone too far. If interest rates fall, that would make it easier to service the company’s £1.1bn debt. Help could come from a Chinese recovery. Hope springs eternal.
Aston Martin has looked like a turnaround play for years, and just keeps plunging. Investors considering buying the latest dip should pack nerves of steel. And that parachute.
This post was originally published on Motley Fool
