Aston Martin Lagonda Global Holdings Plc after issued a profit warning on Monday after its third-quarter deliveries fell short of expectations, sending shares down as much as 7%.
The British luxury carmaker, known for its association with James Bond films, cited weaker-than-expected demand in North America and the Asia-Pacific region, as well as the impact of new trade and tax policies.
The company pointed to challenges stemming from this year’s US-UK trade deal, which imposes a 10% tariff on British-made vehicles up to a limit of 100,000 units.
Meanwhile, changes to China’s luxury taxes have further weighed on sales, creating uncertainty in two of Aston Martin’s key markets.
Aston Martin also said initial shipments of its Valhalla supercar would face slight delays, though it still plans to deliver 150 units to dealers before the end of the quarter.
The company now expects a larger full-year loss than previously forecast and anticipates free cash outflows in the second half of the year.
Market reaction and analyst concerns
Following the announcement, Aston Martin’s stock fell 7.2% 75.45 pence, making it the worst performer on the FTSE 250 index.
The company said it expects its adjusted operating loss for the fiscal year to come in below the lower end of the market consensus of £110 million ($148 million).
Wholesale volumes are also projected to drop by a mid- to high-single-digit percentage compared to last year’s total of 6,030 units.
The luxury automaker said it has initiated an immediate review of future costs and capital expenditures in response to the weaker outlook.
Despite the current challenges, Aston Martin expects profitability and free cash flow generation in fiscal 2026 to materially improve compared with 2025, supported by new model launches and efficiency measures.
Bernstein analysts described the latest guidance cut as “the final straw” for many investors who had been optimistic about a turnaround.
Under its new chief executive officer, the company has introduced one of its strongest vehicle lineups in years, leading to hopes that it was finally on the path to sustainable growth.
However, the delay in Valhalla production and the shift in free-cash-flow expectations have dampened those prospects.
“It felt to many like things were finally starting to turn the corner,” Bernstein wrote in a note to clients.
“But Aston Martin no longer expects to be free-cash-flow positive in the second half, while the ramp-up of its Valhalla car is slower than expected. There might be scope to surprise to the upside next year — but not before a significant reset today.”
Struggles amid a competitive luxury market
Aston Martin’s latest challenges highlight the volatility facing Europe’s luxury automakers this year as they navigate geopolitical and economic headwinds.
Porsche, for instance, has issued four profit warnings in 2024, while Ferrari’s shares continue to trade near record highs, underscoring the varying fortunes across the sector.
Since its much-hyped initial public offering in 2018, Aston Martin’s shares have lost about 98% of their value, reflecting years of financial strain, production hurdles, and delayed product rollouts.
“For many years Aston Martin has failed to balance on the execution knife edge it has as a small cash-burning luxury auto manufacturer,” Bernstein analyst Harry Martin wrote.
Despite the recent setback, Aston Martin remains confident that its upcoming models, including the Valhalla and future electrified vehicles, will eventually restore growth.
However, in the near term, investors appear to be braced for further turbulence as the company resets expectations and navigates a tougher global trade and demand environment.
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