Deutsche Bank’s analysts said: “Last week Aston Martin published Q2 results in line with expectations overall and even better than expected on FCF”
Aston Martin Lagonda PLC () drove higher on Tuesday as raised its target price for the luxury carmaker following recent results.
The German bank raised its target for the FTSE 250-listed stock to 45p from 35p but maintained a ‘hold’ rating with the shares currently trading at 58.65p, up 1.9% on Monday’s closing price.
In a note to clients, Deutsche Bank’s analysts said: “Last week Aston Martin published Q2 results in line with expectations overall and even better than expected on FCF.”
“However,” they added, “the destocking has weighed on results longer than expected and Aston Martin has still 1.2k units to clear before reaching their target sports car inventory level of 800-850 units.”
“This will likely drag into H1-21 and hence incentives will likely lower ASPs until inventories are at target; recouping pricing power will take time and facelifts/new models,” the analysts concluded.
On July 29, Aston Martin said its revenues dropped by more than two-thirds in the half-year to June due to the coronavirus (COVID-19) pandemic and remedial actions by the luxury carmaker’s new management team.
Canadian billionaire Lawrence Stroll led a refinancing of the group and took over as executive chairman in April with Tobias Moers, formerly with Mercedes, now chief executive.
Aston Martin said the number of cars sold in the half-year fell to 1,770 from 2,996, with average prices also lower as the company moved to clear excess stock held by dealers to restore the brand’s exclusivity.
Second-quarter sales were down 48% compared to 34% in the first three months as the full impact of COVID-19 was felt, though Aston Martin said early signs from China, where all dealerships were re-opened in June, were encouraging with retail sales up 11% year-on-year in the month.
First-half revenues were £146m, down 68% year-on-year, while the company posted an interim loss of £227mln after operating losses of £159mln.