It’s amazing to think that the Aston Martin (LSE:AML) share price was trading above 1,200p at the start of 2020. Now, each share is changing hands for just 36p.
This shocking loss of market value is down to a wide range of setbacks. Indeed, Aston Martin has faced enough challenges in recent years to fill several James Bond films.
There have been chronic losses, inflation, higher interest rates, mounting debt, supply chain issues, production delays, quality issues, weak demand in China, high executive turnover, US tariffs, and now the Middle East conflict.
It’s as if Blofeld, Goldfinger, Scaramanga, and Dr No have all joined forces!
What’s the price target?
Despite this, City analysts reckon the FTSE 250 stock can mount a recovery over the next 12 months. Their average price target currently stands at 48p.
If this comes to pass, someone investing today could generate a 33% return. This would turn £1,007 into almost £1,350.
The most bullish estimate is 55p, implying a 52% return. Of course, any recovery depends on strong operational progress. Is there any?
Green shoots of recovery?
To be fair, there were some encouraging signs in the luxury carmaker’s first quarter. Revenue raced 16% higher to £270m, driven by a rise in deliveries of its Special models.
Meanwhile, the gross margin improved by 680 basis points to 34.7%. This was boosted by Valhalla, the firm’s first plug-in hybrid that starts at £850,000. That hefty price tag is before personalisation (specialist paintwork, bespoke interiors, etc).
At the end of 2025, Aston Martin commenced deliveries of the DBX S and Vantage S models, and expects to deliver around 500 Valhalla units this year. And more personalisation options for customers is expected to support growth in average selling prices and margins.
Aston Martin today has one of the most thrilling and diverse line up of models in its 113-year history.
2025 annual report
While wholesale volumes in 2026 will be similar to 2025 (5,448), the firm is “on track to deliver material financial improvement this year” due to the enhanced product mix. Underlying operating profit is expected to move towards breakeven.
Were this to happen, I think there’s a good chance that the share price will be well above 36p by July 2027.
Debt: the formidable final boss
My concern is that Aston Martin’s history on the stock market has been full of false starts and plot twists. Essentially, the carmaker has consistently overpromised and underdelivered.
And the ongoing Middle East conflict isn’t ideal for luxury demand. Yesterday (17 July), the US struck civilian infrastructure in Iran, with Tehran warning that the war will now spread.
For me though, the ultimate Bond villain is the balance sheet. At the end of March, net debt reached almost £1.5bn.
Looking at Aston Martin’s two bonds due in 2029, the risks here become apparent. They’re trading at a huge discount, offering a sky-high yield, and are deep in junk territory (carrying a rating of CCC+).
Needless to say, these punishing interest rates represent a significant cash drain. Free cash flow is expected to remain negative this year.
While I’m rooting for an Aston Martin turnaround, I’m not going to take a punt on the shares. I see better opportunities elsewhere in the FTSE 250.
Should you invest £5,000 in Aston Martin Lagonda Global Plc right now?
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Ben McPoland has no position in any of the companies mentioned.
