Aston Martin Lagonda Global Holdings PLC's (LSE:AML) new CEO, Adrian Hallmark, has made key adjustments to the luxury carmaker’s production strategy, which Citi analysts believe could lead to a more stable path for the company.
Previously, the luxury car maker was expected to deliver around 2,000 vehicles in the first half of 2024 and over 5,000 in the second half. However, under Hallmark’s leadership, the company has shifted to a smoother production curve, with just under 4,000 units now forecast for the latter half of the year.
Citi anticipates that this new approach, which focuses more on customer orders, will lead to a more consistent sales and production model going forward.
This follows the launch of four key models: the DB12, DBX, Vantage, and Vanquish. However, Aston Martin has had to revise down its revenue, earnings, and profit margin targets as a result of this change.
Crucially, the company no longer expects to generate positive free cash flow in the second half of 2024, with an estimated cash burn of £400 million for the full year.
Aston Martin’s market capitalisation currently stands at £900 million, and Citi maintains a "neutral/high risk" rating, with a price target of 117 pence.
In late morning trading, the stock was up 4% at 109.3p.