Last week (21 April), I checked out Aston Martin (LSE: AML) shares. That’s not something I do lightly. The FTSE 250 stock is a sore point for me. It’s blown a small hole in my otherwise thriving Self-Invested Personal Pension.
I’m not the only one suffering. Performance has been abominable since the luxury car maker floated on 3 October 2018. Priced at £19 on the day, its shares now trade at just 42p. That’s a staggering drop of 97.7%. If this car was a Bond villain, it would have invented a machine that eats your money. Yet whenever The Motley Fool runs articles on Aston Martin, they’re a hit. Are investors simply rubbernecking, or is there a magnificent recovery opportunity here?
Is this fallen FTSE 250 star about to fight back?
No stock falls in a straight line, and Aston Martin was having a moment when I reviewed it last week. The shares had just jumped 13.5% in a month. Great rewards await investors who time the Aston Martin share price recovery right. Was this finally it?
Alas, no. If someone had invested £7,007 one week ago, they’d have £6,425 today (ignoring trading charges). With the stock down 8.3% in a week, they’re sitting on a quickfire paper loss of £582.
To be fair, it was a rough week for markets everywhere, as the Iran war drags on. Aston Martin is at the mercy of swings in wider market sentiment. I’ve noticed that on good days, the shares outperform. On bad days, investors should avert their eyes. Surely at some point, this stock has to show its pedigree?
Sadly, there’s no guarantee of that. Aston Martin has famously gone bust seven times in its 113-year history. It might have gone under again, if it wasn’t for CEO Lawrence Stroll. The Canadian billionaire acquired a 16.7% stake for £182m in January 2020, as part of a wider £500m bailout. At the time, the shares traded at 1,187p. My calculations suggest his stake is worth less than £6.5m at today’s price. Stroll isn’t walking away. So can his big bet pay off?
Should you take a massive gamble on this stock?
Sadly, 2025 full-year results, published on 25 February, offered little respite. Wider conditions remain challenging, with US tariffs, falling Chinese demand, and production delays for the £1m Valhalla supercar all hitting sales. Revenue slumped 21% to £1.26bn. The pre-tax loss increased from £289m to £364m. Net debt rose 19% to almost £1.4bn.
The board is working hard to cut costs, while pinning its hopes on improved Valhalla deliveries and margins. Aston Martin still has a terrific brand and top-notch product. Throw in the 007 sheen, and it’s easy to see why investors won’t give up. So would I suggest investors consider buying it? No way. This is about as dicey as a stock can get. One to watch, but only from a safe distance. I can see plenty of thrilling FTSE 100 and FTSE 250 recovery prospects today, and none of them are half as risky as this one.
