Aston Martin Lagonda: Will this fallen angel recover in 2023?

on Dec 6, 2022

Aston Martin Lagonda (LON: AML) share price has come under intense pressure in the past few months as concerns about the luxury automaker remain. The stock was trading at 135p on Tuesday, slightly higher than the year-to-date low of 85.95p. It has plunged by more than 97% from its all-time high, giving it a market cap of over £927 million.

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Fall of a British icon

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Aston Martin Lagonda is a leading British automaker that sells luxury cars around the world. The company has had a remarkable collapse as concerns about the firm’s lack of profitability and high levels of debt.

A key concern among investors is that the company will need to raise more capital in the coming months. In a recent report, analysts at JP Morgan questioned the company’s operating model and whether it can exist as an independent brand.

This was a notable statement since it came a few months after the company raised £653 million as we wrote in this article. It raised these funds from Saudi Arabia and a team led by Lawrence Stroll, the firm’s chairman. The firm also held a rights issue, which diluted shareholders. It used these funds to reduce its balance sheet and support and accelerate long-term growth

Aston Martin share price has dropped as its sales growth slows. Its revenue in the first half of the year rose by 9% while gross margin rose by 600 basis points. At the same time, its wholesale sales dropped by 8% while its adjust EBITDA rose by 20%.

Aston Martin has several catalysts that could see it recover in 2023. First, the company will likely benefit as the supply chain improves. Second, the company’s growth will likely accelerate in 2023. It expects that its wholesale sales will be over 6,600 units in 2022 and 10,000 by 2024. 

Third, the company could be a good acquisition target because of its iconic brand and relatively low valuation.

Aston Martin share price forecast

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Aston Martin share price
Aston Martin stock chart by TradingView

The daily chart shows that the AML share price has been in a strong bearish trend in the past few months. It dropped to the year-to-date low of 85.95p. Along the way, the stock has moved to the 25-day and 50-day moving averages. It has also formed a small double-bottom pattern.

Therefore, while Aston Martin is a risky investment, it seems like it has bottomed because of the double-bottom pattern. If this happens, the shares will likely rise to about 232p, the highest level on July 18.


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