Aston Martin share price analysis: Is it a buy after the 310% surge?

Aston Martin (LON: AMG) share price has made a spectacular recovery, making it one of the best-performing FTSE 250 companies in 2023. The stock has surged to the highest level since April 5th of 2022. It has soared by more than 310% from last year’s low, giving it a market cap of over $3 billion.

Aston Martin Lagonda turnaround strategy

Aston Martin has been implementing a turnaround strategy in the past few years and there are signs that things are moving in the right direction. The most visible turnaround is in Lawrence Stroll’s Formula 1 team, which is now competing with Mercedes and Ferrari for second place in the constructor’s championship.

Aston Martin Lagonda has also made several other measures to boost its business. For example, it raised money from Saudi Arabia in 2022 in a bid to boost its balance sheet. And this year, it welcomed Geely, a leading Chinese automaker as a strategic investor. Geely owns companies like Lotus, Polestar, and Volvo and is known for being a long-term strategic investor.

And on Monday, the company announced the next phase of its turnaround strategy. It announced plans to partner with Lucid Motors, a company owned by Saudi Arabia, for its EV business. Aston Martin will use Lucid’s technology to build its EV brands, which will be launched in 2025. In a note, Stroll said:

 “Based on our strategy and requirements, we selected Lucid, gaining access to the industry’s highest performance and most innovative technologies for our future BEV products.”

I believe that most Aston Martin buyers prefer Internal Combustion Engine (ICE) vehicles and that its EVs will be a small part of its business. This model is similar to one adopted by Ferrari, which has decided not to go all in on EVs.

Therefore, as I predicted earlier this year, there is a likelihood that Aston Martin stock price will continue doing well as the turnaround strategy continues.

Aston Martin share price forecast

AML chart by TradingView

The daily chart shows that the AML stock price has been in a strong bullish trend in the past few months. It jumped above the important resistance point at 305p, the highest point on May 7th. Most importantly, the shares made a golden cross pattern, where the 50-day and 200-day moving averages make a crossover.

The shares retested the 38.2% Fibonacci Retracement level. Therefore, there is a likelihood that the stock will continue rising as buyers target the 50% retracement level at 467p, which is about 30% above the current level.