Capital Calls: Aston Martin

Careful driving. Aston Martin Lagonda’s turnaround year is getting more treacherous. Shares in the UK sports-car maker favoured by James Bond lost as much as 15% on Wednesday after it said it would sell 6,700 vehicles this year, 4% below its previous guidance. Its shares are down nearly 50% since an August capital raise, backed by China’s Geely and the Saudi Public Investment Fund.

It could be a blip. The production shortfall relates to Aston’s new DB12 model, which has been grappling with infotainment systems. More worryingly, the group’s average selling price, excluding its high-value special cars, fell 3% in the third quarter from the same period last year to 183,000 pounds. And orders for the DB12 match production for just the first half of 2024. The hope is that the lower price and orders reflect the supply snag, not falling demand.

Chief Executive Amedeo Felisa and Executive Chairman Lawrence Stroll will have to work hard to meet even the new 2023 targets: the 1,444 cars sold in the third quarter would equate to just 5,800 if annualised, below the 6,700 target. And, with the global economy souring, it may get harder to shift highly priced cars. After the slump, Aston Martin is valued at some 5 times 2024 EBITDA, a sixth of peer Ferrari’s multiple. The relative decline suggests more dangerous driving lies ahead. (By Neil Unmack)

(Source: Reuters Breakingviews)