On Monday, Jefferies, a global investment banking firm, adjusted its outlook on Aston Martin Lagonda Global Holdings Plc (AML:LN) (OTC: ARGGY) shares, lowering the price target to GBP2.50 from the previous GBP2.75. Despite this change, the firm maintained its Buy rating on the luxury car manufacturer's stock.
The revision reflects Jefferies' response to Aston Martin's recent performance and market conditions. The analyst from Jefferies noted that Aston Martin's second quarter is expected to mirror its first-quarter earnings, leading the company to utilize its recently expanded credit facilities. This action suggests a cautious approach by management amid financial pressures.
The same analyst highlighted some positive signs, including encouraging initial feedback on new Aston Martin products and the current lean dealer inventories. These factors are seen as potentially favorable for the introduction and sales of new models.
In terms of financial forecasts, Jefferies revised its expectations for Aston Martin's EBITDA, decreasing it by 6% to £388 million. The firm also adjusted its free cash flow (FCF) projection to a negative £81 million. The new price target of 250p (GBP2.50) is a slight decrease from the former 275p (GBP2.75) target.
The update from Jefferies arrives as Aston Martin continues its efforts to navigate a challenging economic landscape while preparing to launch new models in the competitive luxury automotive sector.
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