How Aston Martin revved up to become the fastest riser on the FTSE 250
Aston Martin is revving up a gear this year after a slew of major announcements, with shares more than doubling in value to make it the best performer on the FTSE 250 in the last 12 months.
The luxury car marque led Londons’ mid-cap index at the end of last week, rising more than 5 per cent after traditionally skeptical analysts backed its remarkable turnaround.
Phillipe Houchois from Jefferies, who has covered the company as an analyst since the 2018 IPO, finally lifted his rating to buy from hold on Friday.
Houchois said in a note that it now “feels like a new start” for the carmaker, “with net debt stabilized, renewed focus on front-engine cars” and a higher average price for its vehicles.
The company is beginning to “close the gap to peers,” he explained, particularly amid a focus on its strongest “profit contributor” front-engine vehicles that see less competition from the likes of Porsche, Ferrari and others.
It marks a significant shift from last summer, when Aston Martin posted losses of £285m – a 215 per cent year-on-year drop as supply chain problems hit deliveries, primarily of its renowned DBX model.
Prior years have also seen it struggle under a significant debt pile, which has hit the companies’ bottom line and hamstrung growth.
But a string of significant announcements in 2023, including an investment from Chinese carmaker Geely in May that saw it double its stake to 17 per cent, have helped the carmaker firm up its balance sheet and drive ahead of other listed groups.
That deal came as part of a wider £2bn push into electric vehicles, an effort by the company to get a foot in the door of China’s increasingly competitive market.
Aston Martin also raised £216.1m through a share placing scheme in August, to help it pay down debts and further bolster its electrification strategy.