Aston Martin Lagonda’s growing confidence has spread to Barclays, which has upgraded its price target and reaffirmed its 'overweight' rating.
Visibility on the range appears very good, said the bank, with most core models, as well as the DBR22 Special, Valour Special, new DB12 (DB11 successor), Valkyrie Spider Special and limited-series V12 Vantage and DBS770 all sold out for 2023 – and at very strong price points.
The recent financing was backed by existing shareholders Yew Tree, PIF, Geely and Mercedes underlining their conviction about the business, said the bank.
Paying off the existing second lien notes will also save around £20 million in cash interest a year.
Company guidance is for a strong final quarter this year with management also reiterating a positive outlook for 2024 and a target to achieve 40% gross margin next year, supported by the new generation sports cars as well as specials.
AML is also confident that the DB12 will be sold out for 2024 by the end of this year and possibly even by the end of the third quarter.
Execution remains a risk, but if AML can deliver towards its new longer-term 2027/28 targets (underlying profits of £800 million/30% margin), Barclays said it can raise its price target further.
The new target is 400p, up from 375p, and 22% above today’s market price of 327p, down 2.3%.