Aston Martin share price alarming pattern points to a crash after profit warning

The Aston Martin share price remains under pressure on Friday after the company published another set of weak financial results and issued a profit warning. AML was trading at 58p, down sharply from last year's high of 121p and the all-time high of 4,545p.

Aston Martin Lagonda woes accelerated 

The Aston Martin stock price has struggled in the past few years as attempts by Lawrence Stroll to turn around the brand failed. 

The most recent results showed that the company's business continued struggling in the last quarter, a trend that may continue in the coming quarter.

In a trading statement, Aston Martin estimated that its vehicle deliveries for the financial year will be 5,4448, down sharply from 6,030 in the previous year. It blamed this slowdown to the US, where Donald Trump announced huge tariffs.

The company expects that its adjusted earnings before interest and taxes will be below the lower end of analysts' estimates. Analysts were expecting a loss of about £184 million, leading them to call it a real burning platform.

The most recent results showed that the company’s business continued struggling in the third quarter. Its revenue dropped by 26% to over £739 million, while its loss before tax jumped to over £252 million.

Lawrence Stroll, a Canadian billionaire, has struggled to turn around the iconic British company. He has changed CEOs, with each of them failing to make any progress. Adrian Hallmark, a former executive at Bentley, became the CEO in August 2024.

He replaced Amedeo Felisa, a former Ferrari CEO, who stayed at the company for two years. Tobias Moers, the previous CEO, also remained at the helm for two years. In most cases, it is often difficult for a company to thrive when there is substantial CEO turnover.

The company has also diluted its shareholders by raising cash from other firms, including Mercedes-Benz, Geely International, and Yew Tree, the consortium headed by Stroll.

At the same time, competition in the auto industry continues rising. A major risk is that US sales will remain under pressure for a while because of Trump’s tariffs.

Aston Martin is also highly indebted. It has about $2 billion in debt, a substantial amount for a company with a market cap of about £600 million. Therefore, there is a likelihood that it will raise more money this year. This will be on top of the $50 million it is raising by selling its naming rights in Formula 1.

Aston Martin share price technical analysis

The daily timeframe chart shows that the Aston Martin share price has remained in a tight range since October last year. It has remained inside the key support and resistance levels at 58p and 67p.

There are signs that the stock has formed a giant bearish flag pattern, which is made up of a vertical line and a horizontal channel. It remains below all moving averages.

Therefore, the stock will likely continue falling as sellers target the key support level at 50p. The bearish outlook will be invalidated if the stock moves above the upper side of the flag at 67p.