Aston Martin surges as demand for $223,000 SUV brightens outlook
Aston Martin Lagonda Global Holdings Plc climbed the most in four months after the British carmaker issued an upbeat outlook for the coming year, driven by demand for its debut SUV.
The company plans to produce 6,000 vehicles this year, up from just 3,394 in 2020, with the £158,000 ($223,000) DBX model accounting for much of that output. Aston Martin’s quarterly revenue and adjusted earnings beat estimates, sending the shares up as much as 13 per cent in London.
Aston Martin spent last year restructuring itself after a rescue by Canadian billionaire Lawrence Stroll. The 61-year-old fashion mogul has injected much-needed cash and forged closer ties with Daimler AG’s Mercedes-Benz to ensure the company survives tumultuous times for the auto industry.
After not having turned a profit since it went public in 2018, Stroll has set targets for Aston to earn £500 million ($706 million) on £2 billion of revenue by 2025. Stroll also has returned the company to Formula 1 racing.
Aston recorded a £70.1 million-pound adjusted loss before interest, taxes, depreciation, and amortization for last year, though earnings on that basis were positive in the fourth quarter. Revenue in the last three months of the year rose 3.4 per cent to £341.8 million.
Aston plans to expand its portfolio of SUVs over the next two years, Chief Executive Officer Tobias Moers said in an interview.
In October, Aston reached an agreement for Mercedes to supply hybrid and electric powertrains to the UK company, building on an engine tie-up that started in 2013. In exchange, Aston will issue new shares to Mercedes, which will boost its stake from 2.6 per cent to as much as 20 per cent over three years.
The carmaker is counting on sales of the DBX to pace its recovery. Deliveries of the model began last year in the midst of the Covid-19 pandemic and ensuing lockdowns. The carmaker also will begin shipping its Valkyrie hypercar in the second half of 2021 as planned
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