My personal warning for anyone tempted by the plunging Aston Martin share price
To some, the collapsing Aston Martin (LSE: AML) share price may look like the ultimate buying opportunity. The luxury car maker is a household name, forever linked with James Bond. Its cars drip with glamour, and its history stretches back more than a century. Few UK brands can match its allure.
Unfortunately, itâs also a deeply troubled business. Aston Martin has gone bust seven times since its original launch in 1913. It has always found new backers, with Canadian billionaire Lawrence Stroll taking the wheel in 2020. He made his fortune building businesses like Tommy Hilfiger and Michael Kors. So far, Aston Martin will have consumed a lot more cash than it has created.
I know how Stroll feels, albeit on a much, much smaller scale. I bought the stock for my SIPP in September 2024. I knew the risks and had misgivings, but couldnât resist. The shares had fallen 95% over five years and were trading at just £1.62. They listed on the FTSE 100 in 2018 at £19. That looked like a huge discount. Surely worth a punt?
FTSE 250 struggler
And yes, I was aware of the old market warning that just because a stock has fallen 95%, doesnât mean it canât fall another 95%. I bought anyway. Nothing has changed. Now in the FTSE 250, Aston Martin shares still seem to move in one direction… down. At speed. They’re down 46% over the last year. And they’re still down 95% over the last five.
Today they trade at around 36p. So despite bagging the stock at a huge ‘discount’, Iâm personally down 78%. Fortunately, I only invested a modest sum, hoping for a bit of action and adventure. I havenât enjoyed it. Losing money is no fun, however small the stake.
One reason Iâm writing this is that Iâve just read a glowing review of its new Valhalla supercar. A two-seat, 3.0-litre, carbon-fibre machine with a price tag of £850,000. It looks sensational. Sadly, the same canât be said for the company behind it.
In February, Aston Martin reported a 21% drop in full-year revenue to £1.3bn. Underlying operating losses more than doubled to £200m, hit by a shift towards lower-margin models. Net debt rose by £200m to £1.4bn. That dwarfs today’s market cap of roughly £366m.
Deliveries fell 10% to 5,448 cars, with little improvement expected this year. The company has cut around 600 jobs, or 20% of its workforce, to save £40m annually. That was before Iran.
Tariff and oil price troubles
The headwinds keep coming. US tariffs, weakening demand and now rising inflation and energy costs add pressure. Aston Martin doesn’t have an electric option yet (its first isn’t due until 2030). Of course, the potential is still there. If global luxury demand rebounds, especially in China, sales could recover. Iâd love to see Stroll turn it around. But right now, the risks dramatically outweigh the rewards.
Iâm holding my small stake, more in hope than expectation. But I wouldnât be surprised to see the shares plunge further from here. Shares can do that. I can see more rewarding bargains on the FTSE 150 and FTSE 250 today. I’ll target those instead.
The post My personal warning for anyone tempted by the plunging Aston Martin share price appeared first on The Motley Fool UK.
Should you invest £1,000 in Aston Martin right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aston Martin made the list?
More reading
- £5,000 invested in Aston Martin shares at the start of 2026 is now worthâ¦
- The Aston Martin share price destruction helps illustrate 5 common investing mistakes!
- Below 40p, Aston Martin’s shares are sinking fast. How low could they go?
- £7,500 invested in Aston Martin shares 5 weeks ago is now worthâ¦
- With the Aston Martin share price at penny stock levels, should investors consider buying?
Harvey Jones has positions in Aston Martin Lagonda Global Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
