By Scott Kanowsky
Investing.com -- London-listed shares in Aston Martin Lagonda Global Holdings PLC (LON:AML) dropped by more than 10% on Tuesday after analysts at Jefferies downgraded their rating of the sportscar manufacturer to underperform.
In a note to clients, the analysts also said the carmaker will most likely require another capital raise despite completing a recent rights issue, adding that the company remains far from reaching the level of both sales volumes and selling prices needed to become a "stand-alone business."
"It feels like [Aston Martin Lagonda] investors must either be prepared to recapitalize the business again once operations reach viable metrics (positive [free cash flow] guidance for 2024) or believe that an OEM will step in and provide the scale AML is missing," they said.
The comments come after Aston Martin lowered its own annual earnings and sales outlook earlier this month, citing higher expenses due to supply chain constraints.
Full-year adjusted earnings before interest, taxes, depreciation, and amortization margin is now expected to rise in a range of 100-300 basis points. That is a decrease from its prior guidance for an uptick of 350-450 bps.
Meanwhile, total wholesale volumes are seen coming in at between 6,200-6,600 units, down from Aston Martin's initial expectation for greater than 6,600.
Aston Martin shares have slumped by more than 90% over the past one-year period, despite the firm trying to solidify its finances and erase its £833.4 million (£1 = $1.1903) debt pile through both the rights issue and a move to add Saudi Arabia's Public Investment Fund as a shareholder.