RE: US Tariffs10 Nov 2024 20:59
Aston Martin Lagonda Global Holdings PLC (LSE:AML) has been downgraded to 'hold' by Jefferies, with the investment bank stating that there is "no more room for error" in the luxury carmaker's financial strategy.
The downgrade follows concerns over liquidity issues and ongoing supply disruptions, particularly in China.
Earlier this week, the British luxury car icon issued a profit warning because of these problems.
Jefferies highlighted that while Aston Martin secured an additional £135 million in liquidity in August, this will only help cover the company's immediate cash burn, pushing its net debt to £1.4 billion by the end of 2024.
The firm now projects a negative free cash flow of £424 million for 2024, significantly increasing the likelihood of new equity needing to be raised.
Jefferies has also revised its revenue forecast for Aston Martin, cutting it by 12% for 2024, largely due to supply chain challenges and weaker-than-expected demand in the Chinese market
The firm now predicts Aston Martin will generate £1.5 billion in revenue for the year.
Jefferies reduced its price target for the company’s shares from 250p to 120p. Shares were changing for 107.65p at the mid-market on Thursday afternoon.