- Aston Martin Lagonda Global Holdings
- 17 June 2024 13:32:26
Source: Sharecast
The bank, which rates the shares at ‘buy’, said Aston Martin “"continues to test investor patience", with the second quarter set to deliver earnings on par with Q1 leading management to draw down recently expanded credit lines.
"Meanwhile, initial feedback on new products and lean dealer inventories also create a supportive environment to ramp new models," it said.
Jefferies said debt refinancing has bought time to go through another (guided) weak second quarter.
"Little room for error after that, and AML will probably draw on its credit line by end Q2 to keep liquidity in excess of customer deposits," it noted. "That said, initial feedback on new products and a few dealer checks showing lean inventories support the sharp increase in activity implied in guidance.
"Recent weakness in demand at the high end of the car market is a concern but AML's volume ambitions are well within the brand's historic volume.
"Our main concern remains the ability to ramp up production to circa 5k units in H2 considering quarterly output has not exceeded 2.5k units in the past."
Jefferies said it continues to see value in AML's "rare attributes combining exclusivity, history, price points, Specials and racing which are only second to Ferrari among exclusive auto brands, in addition to potential M&A interest".
It added that on 2024-25 estimates, AML is trading on 1.4-1.2x revenue and 6.3-4.8x EBITDA.
At 1330 BST, AML shares were down 3.6% at 141.20p.