Despite the company’s pledges to improve performance, Aston Martin‘s (LSE:AML) shares are still yet to generate a profit, seven years on from them listing on the London stock market.
Could the FTSE 250 automaker be on course to turn the corner though? City analysts don’t think so, with further losses per share tipped for the next two years:
| Year | Predicted (losses)/ earnings per share | Earnings growth | Price-to-earnings (P/E) ratio |
|---|---|---|---|
| 2025 | 16.48p | N/A | N/A |
| 2026 | 4.31p | N/A | N/A |
| 2027 | 5.01p | N/A | 13.9 times |
Regular observers may not be surprised by the Square Mile’s gloomy predictions. But with the business tipped to swing into profit in 2027, should long-term investors consider buying Aston Martin shares?
The bull case
Few cars on the market blend the timeless qualities of presence, luxury and speed like Aston Martin. It’s what makes it one of the world’s most desirable brands.
Unlike with many classic names, Aston’s cars have the substance to back up its glamarous image. Indeed, despite the scale of the company’s internal problems, the quality of its products are at an all time high, as reviews of its Vantage model launched in 2024 illustrate.
“Aston’s offerings get better and better and the new Vantage [has] fabulous styling and fabulous performance“, sports car bible evo said. WhatCar described the new model as “Aston Martin’s best sports car to date, providing a thrilling drive and a classy interior“.
In a market as competitive as this, having products with the oomph, the sense of luxury and the brand power is critical. And Aston’s momentum in product development is a promising omen.
The bear case
It’s something of a tragedy that while its vehicles’ stock has never been higher, Aston Martin the company remains in dire straits. Accordingly, its shares are now changing hands at 69.7p per share, a remarkable collapse from the carmaker’s IPO price of £19 back in 2018.
Leadership crises, manufacturing issues, and product development delays have all dogged the company in recent years. Revenues are still tumbling (down 13% in quarter one) despite rising wholesale volumes (up 1%). Margins are also falling — down 9% between January and March, to 28% — and losses continuing, although an £80m pre-tax loss in Q1 narrowed from £139m a year earlier.
Meanwhile, net debt continues climbing, and at the end of last quarter stood at £1.3bn.
Should I buy?
Unfortunately, the challenge for James Bond’s favourite carmaker’s got even more challenging amid the spectre (no pun intended) of lasting and punishing US trade tariffs.
Aston announced last week that it’s “currently limiting imports to the US while leveraging the stock held by our US dealers“. This takes the level of danger to the company considerably higher — more than a third of its vehicles were sold Stateside in Q1.
So forget about those predictions of Aston Martin finally generating a profit in 2027. I worry that the FTSE 250 carmaker won’t even be around then, so I won’t be buying its shares any time soon.
