Aston Martin’s share value has dropped significantly due to a profit warning.
- The carmaker’s stock fell by 20%, hitting a two-year low after production issues.
- Supply chain disruptions have adversely affected Aston Martin’s 2024 production goals.
- Challenges in China and supplier insolvencies are cited as major concerns by the company.
- Despite current setbacks, Aston Martin aims to achieve its future financial targets.
Aston Martin has faced a substantial decrease in share value, with a 20% drop marking a two-year low of 127½p. This decline follows a profit warning, largely attributed to supply chain disturbances affecting the production of four re-engineered models. Consequently, the car manufacturer has revised its 2024 production target from 7,000 to 6,000 vehicles.
The company attributes its lowered production forecast to persistent supply chain challenges and significant economic issues in China. Notably, Aston Martin has been hampered by the insolvency of key German suppliers—Recaro and Eissmann—who are instrumental in providing essential components such as seats and dashboards.
Despite aggressive growth plans requiring flawless execution, Aston Martin acknowledges that it won’t achieve cash flow positivity in the latter half of 2024. This announcement comes as a new CEO seeks to stabilise production in upcoming quarters amidst an uncertain economic landscape.
Lawrence Stroll, Aston Martin’s chairman, remains optimistic, reaffirming his dedication to the company’s recovery plans. He projects that by 2025, Aston Martin will meet revenue goals of £2 billion and operating profits of £500 million. Yet, forecasts suggest a challenging path, with expectations of a 5% revenue decline in 2024.
Analysts, including Barclays’ Henning Cosman, have voiced their disappointment in Aston Martin’s current situation, highlighting ongoing difficulties in meeting ambitious targets. Nevertheless, projections for 2025 remain positive, with anticipated revenue growth and profitability.
Despite recent setbacks, Aston Martin is strategically positioning itself for recovery and growth in the coming years.
