The Aston Martin (LSE: AML) share price has been a car crash since the company floated in October 2018. It launched at around £19. Today, it’s trading below 69p. That’s a collapse of more than 96%.
Over the last 12 months, another 54% has vanished. An old investment saying warns that just because a share has halved doesn’t mean it can’t halve again. Aston Martin is that mantra in action.
But I forgot the mantra and bought in last year. I’ve now lost more than half my money. So far. But like many other investors, I can’t walk away. Perhaps it’s the beauty of the cars. Perhaps it’s the brand. Perhaps I’m addicted to the pain.
Fast falling FTSE 250 stock
There are reasons the share price has been such a catastrophe. Costs have run wild. The expensive shift to electric now looks slower than expected. Sales in China have slowed sharply as the economy falters. The latest blow is Donald Trump’s proposed 25% tariff on imported cars, including from the UK.
The cars themselves are stunning. The financials aren’t. There’s no dividend.
New CEO Adrian Hallmark has a good record from his time at Bentley and promises to bring discipline and financial sustainability to the business. That’s a big job. Canadian billionaire Lawrence Stroll keeps backing his belief with fresh capital injections. Maybe he’s addicted to the pain too.
More than a billion in debt
2024 full-year results, published in February, offer some encouragement. The average selling price hit a record £245k, up 6% thanks to high demand for personalised and special-edition models. Wholesale volumes slipped 9% year-on-year, but Q4 showed signs of life with an 8% rise.
Total revenue fell 3% to £1.58bn, while net debt ballooned to £1.16bn from £814m a year earlier. Today’s high interest rates make that more costly to service. Although the group still has £514m of liquidity.
Hallmark sees 2025 as a turning point, with the aim of delivering positive adjusted earnings and free cash flow in the second half. Longer-term targets for 2027 and 2028 remain unchanged. Hope springs eternal.
Analysts still believe. Maybe
Analysts covering the stock have a median 12-month share price target of 96.5p. That’s nearly 45% higher than today and would turn a £10,000 investment into £14,500. It would mark a wonderful comeback. I’m willing Aston Martin to succeed, and not just for my own sake.
But forecasts are fickle, especially now. Many of these targets likely predate Trump’s tariff war and the latest leg of the share price collapse. They could be out of date already.
A trade deal between the UK and the US might offer some relief. Aston Martin has gone bankrupt seven times in its 112-year history. The shares could just as easily fall 45% as climb.
Of the nine analysts following the stock, two rate it a Buy, six say Hold, and just one says Sell. I’m holding, reluctantly. Selling what I’ve got is hardly worth the trading fees anyway.
I wouldn’t suggest that any rational investor considers buying Aston Martin shares today. If tempted, they should only use money they can afford to lose. Presumably like Lawrence Stroll.
