Aston Martin set for meaningful step-up in profitability, Citi says

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Aston Martin Lagonda Holdings PLC’s is set for a meaningful step-up in profitability in the fourth quarter, according to analysts at Citigroup, which rates the luxury sports car brand as a ‘buy’.


This week, Aston Martin reported its 2021 nine-month results revealing its set to meet its FY21 earnings before income, tax, depreciation, and amortisation (EBITDA).


The company said trading was in-line with internal expectations in the year today as it left guidance unchanged – with longer-term forecasts eyeing GBP500mln of annual earnings by 2025, on an expected GBP2bn of revenue.


“We expect the company to generate a 13.2% EBITDA margin in FY21 (14.5% excluding the GBP15mln legal cost impact, in-line with the ‘mid-teens target) and expect profitability to 19.4% in FY22,” said Citigroup, an American investment bank.


“Average sales price remains solid, cost efficiencies are contributing to improved gross margin, and special deliveries in Q4 will drive a meaningful step-up in profitability.”

Citigroup sees some 67% upside with its GBP29.00 price target.

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