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At 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 direction of 2026, it’s in a whole 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% up to now three years.
So, like James Bond limping out of a burning constructing, would possibly the Aston Martin share worth additionally stage its personal unlikely escape?
What’s gone unsuitable?
The checklist of challenges and issues on the luxurious carmaker could 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% 12 months on 12 months to £285.2m, as wholesale volumes fell 13% to 1,430. Each different determine worsened, making this an alarming set of numbers to learn.
Supply: Aston Martin.
One vivid spot was that the primary deliveries of the Valhalla hyper-car began in October. This high-margin beast might give a monetary increase, assuming there aren’t any extra manufacturing delays. The DBX S and Vantage S are additionally on the roads.
Nonetheless, CEO Adrian Hallmark mentioned the long run product cycle plan is now beneath evaluation. This will likely be accomplished with the goal of “optimising prices and capital funding while persevering with to ship revolutionary, class-leading merchandise to fulfill buyer calls for and regulatory necessities“.
Wanting on the stability sheet, this isn’t shocking. In September, internet 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 vital monetary challenges.
Fitch mentioned Aston Martin carries extra debt and has the weakest free money stream technology of some other 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 seems to be low, this doesn’t tempt me to take a position. Gross sales are declining, dragging all the things else down.
Besides Ferrari, whose order e book stretches into 2027, luxurious carmakers are struggling. And there’s no signal issues are enhancing but.
Nonetheless, Govt Chairman Lawrence Stroll stays bullish, saying that his “confidence in the long-term prospects for this iconic British brand and commitment to the company remains unwavering”.
In my eyes, the almost definitely end result right here is that the enterprise will likely be taken personal (the Monetary Instances reported on this risk just lately). Nonetheless, whereas this might internet a tidy revenue for these shopping for at the moment, it won’t. 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 at the moment.
Sadly, whereas I’m a giant fan of the model, vehicles and James Bond associations, shopping for the inventory at 59p would really feel extra like a dangerous gamble to me.
Due to this fact, 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.
