Expecting group sales to decline in calendar 2020, with core sports car volumes falling to 3,100 and a £125mln operating loss to follow, the analysts think the market's concerns about the balance sheet will linger.
The broker's target price was slashed to 30p from 133p as forecasts were rejigged to reflect the recent £536mln rights issue and placing led by Canadian billionaire Lawrence Stroll, along with a first stab at working out the potential impact from Covid-19 on performance this year.
There has been no recent guidance on sports car volumes this year, with the company’s last word being in February when new executive chairman Stroll that volumes would be materially lower this year as part of a rebalancing to reduce dealer inventories and regain price positioning.
With the pandemic likely to reduce volumes even further, the analysts have assumed that sports car volumes virtually halve this year to 3,100, similar the trough in 2009.
The limited-production Valkyrie ‘hypercar’ model, of which only 150 will be made, is expected to begin with 30 deliveries in the second half of the year and 80 in 2021, while the track-only Valkyrie AMR, which is limited to just 25 vehicles, will be delivered in 2021/22.
“The Valkyrie programme is critical to the group’s mid-engine strategy and is expected to be followed by the Valhalla and then Vanquish,” the analysts noted.
The group began a gradual reopening of its St Athan facility in Wales last week, using new safety measures and social distancing protocols, this will also allow production of the new DBX.
Orders for the SUV model, which has been building over the last six months and in March already exceeded planned production volumes for 2020, with 50% of the customer base new to the Aston Martin brand and 60% in target regions of Asia-Pacific & the Americas.
However, the analysts have trimmed their forecast for 2020 sales volumes for the DBX to 1,600 vehicles “to allow for some slack” in the ambitious production ramp through the second half, before expecting 2,400 units in 2021 and 3,000 units in 2022.