Aston Martin (LON: AML) was started at Overweight with a 175p price target by Barclays in a note on Thursday.
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The company saw its shares tumble over 15% on Wednesday last week following its third-quarter results. It reported Q3 revenues jumped by 33% to £316 million, driven by higher average selling prices of £189,000, but revealed an operating loss of £148 million, including a £71 million annualised increase in depreciation and amortisation costs.
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Despite the share price decline following the results, it recovered those losses the next day and is now up 43% in the last week after gaining 4.9% on Thursday. So far, on Friday, it is down 0.67%.
Yesterday, Barclays told investors in a research memo that Aston Martin is a high-risk, high-reward proposition, but it sees a “plausible path to a sustainable business model.”
“Product launches (including 2023/24 Sports/GT line-up renewal) should drive higher volume, higher revenue per unit and support AML’s more than 40% gross margin target for new models – so that despite AML’s significant execution risks, our price target implies circa 15x 2025e price-to-earnings,” explained Barclays.
The firm pointed to other risks, such as lower-than-expected volumes, pricing, and continued and new supply constraints.
Following its Q3 release, JPMorgan and Deutsche Bank analysts lowered their price targets on the stock.
According to TipRanks, out of six analysts with ratings on Aston Martin, two have Buy ratings, three have Hold ratings, and one has a Sell rating on the AML shares. The average price target is 132.83p, representing around an 11% downside from current levels.
