Luxury Carmaker Aston Martin is Driving to Survive

Big things are happening at Aston Martin — whose stock is up 154% this year. Yesterday, Goldman gave Aston a buy rating for the first time since 2019.

• Aston Martin has been through the corporate ringer in the past few decades — going through several owners while struggling to survive.
• In 2020, Canadian billionaire Lawrence Stroll acquired a 25% stake in the carmaker — and rebranded his Formula 1 team Racing Point, which he acquired in 2018, to Aston Martin.

Stroll and Aston Martin have made massive investments in his Formula 1 team — taking it from a struggling performer to a championship contender in five years.

But the returns on those investments have been questionable — requiring investment from Saudi Arabia’s sovereign wealth last year to survive.

Aston sets its sights on more than a championship

Aston’s stock is still down over  90% since going public in 2018. But Stroll has plans to revive the brand with some major announcements this year:

• Quadruple earnings and double revenue within five years.
• Releasing eight new sports car models in the following two years — with its first electric vehicle coming in 2025.
• Focusing on luxury customers — with car prices starting at $200K.

Entering the ultra-luxury segment puts it wheel to wheel with Ferrari (NYSE:RACE) — whose stock has far outperformed the S&P 500 with sales remaining strong despite the slowdown in recent years.

Ferrari’s profit margins are also significantly higher than others in the luxury segment — which Aston desperately needs to bring itself back to profitability.