Aston Martin shares plunge 12.4 per cent following Jefferies downgrade
Aston Martin’s shares today slumped as low as 12.4 per cent following Jefferies’ downgrade.
Stocks seemed to have slightly recovered since this morning as they were 9.89 per cent down around 12.30pm.
In an analyst note sent this morning, the US investment bank demoted the luxury car maker from ‘hold’ to ‘underperform’, while slashing the target price by 77 per cent to 120p per share.
This was down from the previous target of 530p per share.
“Despite having just completed a major rights issue, Aston Martin Lagonda still screens as candidate for future recapitalisation by the time the business achieves a viable operating structure, possibly 2024,” the Jefferies note read.
According to analysts, Aston Martin – which floated on the LSE in October 2018 – has yet to achieve a sustainable operating structure and capital.
“Trading conditions have certainly been challenging but the last few years have also been supportive for luxury sports car demand,” Jefferies said.
The downgrade comes less than two weeks after the luxury marque was forced to lower its wholesale delivery volume forecasts due to supply chain issues.
Volumes, Aston Martin said when posting its third quarter results, were down by four per cent year-on-year to 4,060 cars.
“Over the last two quarters we have encountered specific supply chain challenges that have delayed our ability to meet customer demand,” executive chairman Lawrence Stroll said on 2 November.
“Whilst we moved quickly to resolve the shortages that affected our Q2 performance, our Q3 growth was hindered by new supply chain challenges, impacting more than 400 vehicles that had been planned to be delivered in the quarter.”
City PM has approached Aston Martin for comment.