Aston Martin – Hands in pockets - Model Update
All,
Please find our updated analysis here.
A profit warning from Aston Martin (AML) opened the week, and a downgrade to CCC+ from S&P closed it. The company will need £200m to £250m in fresh cash, but we expect the shareholders to put their hands in their pockets one more time. The US Tariffs have been more damaging than we thought, and we expect the current US Federal shutdown might snag the Valhalla deliveries more than expected. The lack of a 2026 outlook has dissuaded us from looking at the SSNs until after we get more details on the impact of Tariffs on the Q3 orders and why the 2026 outlook is so unclear, given the new car lineup.
Investment considerations:
- We have not taken a position in AML yet; the recent profit warning has pushed yields out to 14% which is interesting to us. We see the EV of £2bn covering the SSNs. However, we will wait for the Q3 results on 29th October. We expect the US federal shutdown to delay Valhalla deliveries to the US.
- We see 5 points of upside when the cash raise is announced, but expect little positive movement until then. We don’t see the SSNs trading inside 12% soon. We see 5 points of downside if AML toughs it out and delays raising cash.
- We want some more clarity on 2026 regarding the order book.
- We forecast GBP200m - GBP250m of additional cash to be raised, but we do not expect this to be announced before the results.
- Our view on AML has not changed, as we had expected and modelled an additional GBP100m of cash to be needed by Q2 2026.
Key Conclusions:
- As our Key Value drivers section points out, there is still £600m of equity under the bonds. The company will need £250m in cash to fully fund itself, but we expect the major shareholders will continue to be supportive.
- The Trading section highlights that H2 units sold are likely to be below last year, we estimate 13% down. The issues seem to have been in the Americas and APAC, despite both being in line with the prior year in H1 25.
- In our driver section, our forecast is for volumes of 5400, and Revenue of £1.2bn in 2025, rising to 6,700 and £1.9bn by FYE28. H2 25 Unit sales would be down 13% year on year if the FY25 reduction is in the high single digits. We suspect it will be, and that is reflected in our Model section.
- Long-term, we see Aston Martin being bought by Geely.
- There remain risks to the company, including the costs of electrifying its fleet, but these have been pushed back.
Trading Update:
- The 06/10/25 profit warning was driven by lower volumes, following a weak Q2 and a significant deceleration in sales in Q3. However, the group ended Q3 with £250m in liquidity,
- We are concerned that guidance for Q4 is also weak, and the group is warning about the difficulty of forecasting volumes into next year, given the ongoing uncertainty in US trade policy. The current issues at JLR should have removed immediate concerns about the cap on automotive exports to the US (at current tariff rates). However, next year, JLR is likely to return to full production, and with the export cap being on a first-come, first-served basis, Aston could face tariff pressure in H2 26.
- Aston Martin reports full Q3 numbers on 29th October 2025.
Here to discuss this name with you,
Aengus
T: +44 203 744 7055