Aston Martin Lagonda Glo... Share Discussion Threads

[florenceorbis] 30/11/2024 20:43

Analysts' Consensus

Mean consensus
OUTPERFORM

Number of Analysts
14

Last Close Price
411.50EUR

Average target price
471.38EUR
Spread / Average Target
+14.55%

High Price Target
531.61EUR
Spread / Highest target
+29.19%

Low Price Target
368.63EUR
Spread / Lowest Target
-10.42%





MarketScreener

[ariane] 30/11/2024 20:30

Should I buy more Ferrari shares for my SIPP?

Ferrari stock has done very well in this investor’s SIPP portfolio. But is it attractively priced to warrant investing more money in it?


Posted by
Ben McPoland ❯

MOTELY FOOL

Published 30 November, 10:10 am GMT




Unfortunately, I’ve not had a spare €400,000 lying about recently for a Ferrari (NYSE: RACE). That’s the average selling price (ASP) for a new one nowadays. But I was able to rustle up enough cash to buy a few shares of the Italian luxury automaker a while back for my Self-Invested Personal Pension (SIPP).

The stock has done very well, rising 90% in just the past two years. This is impressive when most other luxury stocks have been smashed due to weak China sales.

Should I add to this winning stock today? Let’s pop the bonnet and take a look.




At first glance, Ferrari might look like just another manufacturer of sports cars. However, I think it’s more accurate to view the Prancing Horse as the world’s leading luxury brand.

In Q3, the company only sold 3,383 vehicles. But it could likely triple that figure in a heartbeat if it chose to. After all, the cars are built to order for ultra-high-net-worth individual clients, with the order book stretching well into 2026.

The reason it doesn’t sell more is because Ferrari needs to maintain an aura of exclusivity. CEO Benedetto Vigna argues that seeing a Ferrari on the road should be like encountering an exotic animal.

Unfortunately, even if I had €400,000, I probably wouldn’t be able to buy a new Ferrari. There’s a massive waiting list to even be considered as a potential customer, while 74% of cars made last year were sold to existing clients.

Ferrari will always deliver one car less than the market demands.

Enzo Ferrari

Serious pricing power

This scarcity gives the company incredible pricing power. As mentioned, the ASP is now around €400,000, up from €270,000 in 2015. Some special models exceed $1m.

The firm is also benefiting from customers enthusiastically paying up for increasing amounts of vehicle personalisations (extremely high-margin revenue).

As we can see below, Ferrari’s net margin has more than doubled inside the last decade, from 10% in 2015 to an incredible 21% today.




Most auto firms are high-volume, low-margin producers. Ferrari has flipped that on its head, with ultra-high margins on low volumes.


Brand image risk

Some investors might still question the investment case for this stock. After all, if the firm closely limits supply to maintain high demand, where’s the growth going to come from long term?

It’s a valid question, and Ferrari’s continued success is linked to the growing population of multi-millionaires and billionaires. Current trends indicate that this affluent (and aspirational) demographic is expanding, particularly in Asia.

This should enable Ferrari to gradually increase its annual production volumes while maintaining the brand’s exclusivity. It’s also moving onto the water by launching a sail racing team and building a racing yacht.

Yet the brand image is everything here. If that were to somehow diminish, then the company’s reputation and ultimately pricing power would be threatened.
Will I buy more shares?

I’ve been waiting for a decent pullback in the share price all year. There’s been a slight one — 13% since August — but it’s not enough for me. The stock’s still trading on a high forward price-to-earnings (P/E) ratio of 47.

That’s actually above luxury peer Hermès (43).

Therefore, I’ll continue waiting patiently for my opportunity to buy more shares.







Ben McPoland has positions in Ferrari. 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.

[dancing piranha] 30/11/2024 15:10

You can argue with Tony all you like...

But over the last few years, and since I entered the fray at £12, he has called this spot on!

I've not seen a single person able to construct a sensible argument against his facts!

Most are simply clueless "Chancers" that come and go in their droves... lol!

[essentialinvestor] 30/11/2024 14:53

No need to get personal here, most of us love the cars they manufacture, AML as an investment is a very different story.

I would guess taken private is where this may be heading.

[swiss tony] 30/11/2024 13:57

Most of the directors were buying shares above £19.
I'd say that looks pretty stupid now at £1.

[dealy] 29/11/2024 20:17

Of course they have "capital capacity" - look at the cheques that were written this week to bring money into the company when needed. Look at the announcements today from directors. That is why I used the word "capacity".You are so arrogant - you think that these people are stupid compared to you.

[swiss tony] 29/11/2024 15:56

"It's about the value of an iconic brand and having sufficient capital capacity to sail through the difficult periods"

Do they have the capital capacity?
It's statements like this which come across as idiotic when AML have raised 2bn in 4/5 years Stroll has owned it.
Almost £1bn since he said, "Mark my words, black and white, we don't need any more cash".

If you don't want to be called an idiot, stop saying idiotic things.

[diku] 29/11/2024 10:46

If they did a 7% discount on placing isn't that a desperation?...

[dealy] 29/11/2024 09:46

Let me give you a tip which might help you get through life without being hated by everyone: stop accusing people of being idiots or having no sense of logic.

[swiss tony] 29/11/2024 09:34

I am still waiting on an answer to how this is good value?
Brand schmand, only idiots fall for brands.

[swiss tony] 29/11/2024 09:32

Which AML cannot do. They have to keep raising cash every few months to stay afloat.
Stroll has ripped through £2bn since he took over, with nothing to show for it.

Tell us Dealy, how can you see value as a shaeholder? And don't promise 10,000 sales like Stroll does, that's a pipe dream, AML historic average is 6000-7000 cars, which is hugely unprofitable.
There are already many DB12s with huge discounts for sale, so much for raising prices.

Football clubs get asset stripped in exactly the same way, load it full of debt to try and win something, if it fails sell out at a profit, leave the club in debt and fans raging.

You have to question the logic of someone who compares one of the worst performing companies ever on the LSE to football club investing, thinking that is a positive.

Buffet is so good because he has common sense.

[dealy] 29/11/2024 08:17

That valuation logic would make most football clubs appear worthless, yet they trade hands for billions. It's about the value of an iconic brand and having sufficient capital capacity to sail through the difficult periods

[swiss tony] 28/11/2024 09:02

7 idiots recommended your post.
It's the same post since IPO, great value BS.
AML's market cap has been down to £450m, today it's at £888m, so could still fall a long way and not be the lowest it's been.

Show us all how £1 per share is good value for a company losing hundreds of millions every year, with 1.5bn in debt, which is DOUBLE the market cap!
We want to see workings and maths, not some pishy opinions based on losing so much money you're desperate to see it go back up.

Deluded, share prices go up when good things happen, not 2 profit warnings in quick succession, raising cash to stay afloat for 3 months (at best) and potential tariffs to end growth in the US car sales.

You do realise without decent sales in China and the US, AML would be selling around 4500 cars instead of 6500?

[cashisking76] 28/11/2024 08:23

A truly iconic brand here with undeniably great cars along with new lineups plus strong new CEO in place and now, a very much undervalued/oversold company share price ready for takeoff, IMHO!

[swiss tony] 27/11/2024 19:16

Dealy, nonsense, Ferrari are doing just fine.

[factsandfigures] 27/11/2024 15:27

Another fund raising and more dilution !!

Aston Martin forced to raise £210 Million through a share and private debt placings to shore up its balance sheet.

This coming just one day after Aston Martin announced its second profit warning within two months.

[dealy] 27/11/2024 12:04

They are performing similarly to hundreds of other companies who are collectively struggling with the same things. It's the economic cycle and it can turn in a positive way soon (lower interest rates, lower future energy cos, stimulus etc). What's the alternative? Mass unemployment?

[pre] 27/11/2024 11:43

smoke and mirrors -another profit warning, who are they kidding, US tariffs will no doubt impact revenues next year, surpised it is still above a £1

[tomboyb] 27/11/2024 11:26

I don't think the placing price is the problem -

It was a pretty good price considering the market conditions -

[dealy] 27/11/2024 11:13

They did the placing at a 7% discount. I've seen companies do placings at 75% discount.

[blackhorse23] 27/11/2024 09:54

Next placing in 3 months time , bankrupt company

[tomboyb] 27/11/2024 08:52

I think AML has enough problems barring the geopolitical tsunami that will be coming -

[dancing piranha] 27/11/2024 08:33

The shock....

Obviously AI forecasted this?

[diku] 27/11/2024 08:30

So 100p will be taken out now?...lock them in...

[dealy] 27/11/2024 08:18

bottom line: this company has strong shareholders who believe in the long term story