Aston Martin shares slide 6.7% as HSBC cuts price target

Shares in Aston Martin Lagonda (LSE: AML) sank 6.7% on Wednesday after HSBC cut its price target for the luxury carmaker to 255p from 380p. HSBC analysts maintained a “hold” rating on the stock, stating that the sector remains a “mixed bag”.

The downgrade comes a month after Aston Martin reported a significant narrowing of pretax losses in the first nine months of 2023 to £259.8 million, a 49% improvement from £511.3 million last year. Revenue rose 21% to £1.04 billion on increased demand. However, production challenges caused the company to lower its 2023 volume guidance by 4% to about 6,700 vehicles.

Aston Martin has attributed its improving financials partly to strong initial demand for its new DBX707 SUV and DB12 sports car. The upcoming launch of another next-generation sports car in early 2024 is also garnering interest.

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Executive Chair Laurence Stroll recently increased his stake in Aston Martin to 26.2%, signalling ongoing confidence. However, analysts are taking a cautious view of the stock for now.

Despite being up 37% year-to-date, Wednesday’s HSBC downgrade put pressure on Aston Martin’s share price. Investor enthusiasm could return if the company delivers on its strategic vision and upcoming model launches.