قالب وردپرس درنا توس
Home / Business / What Should Investors Do on the IPO of luxury car maker Aston Martin?

What Should Investors Do on the IPO of luxury car maker Aston Martin?




<div _ngcontent-c16 = "" innerhtml = "

It has been rumored for some time that the British luxury car manufacturer Aston Martin, who boasts being the car of choice for the most famous spy James Bond, is about one IPO on the London Stock Exchange

Confirmation finally came in the wake of Aston Martin's semi-annual financial release on Wednesday (August 29), which targets a valuation of around £ 5 billion ($ 6.65 billion) Twice as high as conservative estimates circulating in London's financial community for a company with a good legacy, but a troubling financial history.

Aston Martin says that it just submits a registration document to the British Financial Conduct Authority, a legal requirement for companies considering an IPO on the UK market and will be decided until September 20 if she should continue.

An Aston Martin DB11 luxury automobile outside the company's factory and assembly plant in Gaydon, U.K .. Aston Martin is seeking a valuation of up to £ 5 billion ($ 6.45 billion) in a possible IPO of the British sports car manufacturer. (Photo: Chris Ratcliffe / Bloomberg)

The announcement has fueled market momentum when Aston Martin appears to be following a competing Italian sports car maker Ferrari on a public list. By comparison, New York-listed Ferrari shares will trade more than 35 times their estimated earnings in 2018, according to Thomson Reuters, compared to around 7.3x earnings forecast for Stoxx Europe 600 automobiles & Parts Index.

Understandably, Who's Who of Wall Street is involved in the Aston Martin IPO. Lazard acts as a financial adviser to the company, while Deutsche Bank, Goldman Sachs and JPMorgan Securities arrange the sale. You can understand the excitement, but should you buy it when it happens? Here are things that are worth considering before you take the plunge:

The Car Company's Worrying Financial History

While the latest financial figures for H1 2018 look good, with sales up 8% £ 449.9 million and an operating profit of 17% to £ 64.4 million, the company's problems in the past, including a series of bankruptcies and ownership chain should not be forgotten.

During its 105-year history, Aston Martin has filed for bankruptcy no fewer than seven times, and has had several owners including Ford. It is currently controlled by Investindustrial Advisors Ltd and Kuwaiti Investment Dar.

The company has said that existing investors will sell shares in the IPO, which will result in approximately 25% of the company's stock trading on the London Stock Exchange. Daimler, the manufacturer of Mercedes-Benz, also holds a stake of 4.9% and intends to hold it in the event of a possible stock market listing. But current stakeholders should comfort the potential IPO enthusiasts to continue the good work of recent years.

At the same time, the volatility of the luxury car market – which Aston Martin has been following in the past – should falter. Again, a declining public assessment would lead to open tinkering rather than closed-ended remedies, and the results could vary widely. In a related analogy with a very different kind of automaker – Elon Musk's discomfort with a publicly listed Tesla illustrates this.

The Man in the Lead

While Aston Martin's worrying financial past should be a cause Given the concerns of potential investors, the recent performance of the company was impressive. The turnaround began in 2014 when Andy Palmer, a former Nissan board member, took over as Chief Executive Officer.

Andy Palmer, CEO of Aston Martin, poses for a photo while sitting in the company's sports car. (Photo: Kentaro Takahashi / Bloomberg)

Palmer stabilized a rocky ship and its production rates should rise to 7,300 cars next year. That's the highest value since the 2009 global financial crisis. Palmer has also been launching new models such as the upcoming DBX Sports Utility Vehicle (SUV) in 2019 and the popular DB11

which is looking at a range of electric vehicles that are based on the Ultra Luxury segment, and increase production to around 14,000 units a year in the not too distant future. It seems the management is doing an impressive job. While this may be an advantage, the IPO will not provide Aston Martin with additional capital to increase its production.

As the global financial crisis has shown, sales of luxury cars are correlating with economic booms and busts. The global economy is working hard right now, but nobody can guarantee that, and how Palmer and his team react to a future global slump still needs to be tested.

Expansion, Ambition and Brexit

Some commentators believe that Aston Martin's planned expansion could lead to a dilution of his mark. That's a very volatile assumption. The company was pretty sure that much of its expansion was aimed at relocating more units in lucrative Asian markets, increasing sales in the region from 16% to 25% without affecting the European and North American outlets.

Overall, Aston Martin says it is targeting sales of 6,200 to 6,400 units this year, up from 9,800 units by 2020, when a new plant in Wales goes into production. Even if it falls short of the stated short- to medium-term production targets by 10% and margins are maintained, the profit is expected to increase over the next three to four years.

The steering wheel of an Aston Martin DBS Superleggera model. (Photo: Chris Ratcliffe / Bloomberg)

Of course, Brexit is on the horizon. Like all UK assembly lines relying on parts of the European Union (EU), Aston Martin is subject to Brexit, although Palmer claimed in a BBC interview on Wednesday that his company was "impenetrable".

In the same interview, Palmer admitted that Aston Martin is amassing engines with partial German components in preparation for "post-Brexit limit delays". But he added that while the company exports 25% of its cars to the EU, it would benefit from a weaker pound. It remains to be seen how all this will end, but it is a risk that every potential Aston Martin shareholder should consider.

Conclusion: For Petro – Heads, Fans and Those After a Piece of British Car Driver [19659001] If, and there remains a big If Aston Martin achieves its £ 5 billion target rating, then it would be the luxury carmaker within reach from the British Blue Chip Index – the FTSE 100 put. Does the company deserve this stature on branding alone? Does it still have much to prove? Probably not!

Overall, earnings and revenue should rise, but the stock is unlikely to be a high-yield affair unless its aggressive expansion into emerging luxury automobiles fails to materialize. But it's unlikely that petroleum cows, Aston Martin fans and those looking for a slice of a unique British brand will be behind some of the finest cars on the road to buying their stock.

Of course, room for cautious optimism with Aston Martin. But for potential mainstream investors, focusing on financials should be much more important than branding.

">

It has been rumored for some time that the British luxury car manufacturer Aston Martin, who boasts being the car of choice for the most famous spy James Bond, is considering going public on the London Stock Exchange [19659001TheconfirmationeventuallycamewiththereleaseofAstonMartin'shalf-yearfinancialsonWednesday(August29)Theautomakertargetsavaluationofaround£5billion($645billion)afigurethatistwicetheconservativeestimatethatDoingbusinessinLondon'sfinancialcommunityforacompanywithagoodlegacybutwithatroublingfinancialhistory[196591] Aston Martin says it is filing a registration form with the UK's Financial Services Authority for companies considering going public in the UK market and decide by September 20 whether to proceed.

An Aston Martin DB 11 Luxury automobile outside the company's production and assembly plant in Gaydon, UK. Aston Martin targets a valuation of up to £ 5 billion ($ 6.45 billion) in a potential IPO of the British sports car manufacturer. (Photo: Chris Ratcliffe / Bloomberg)

The announcement caught market interest as Aston Martin seems to be following the rival Italian sports car manufacturer Ferrari towards an IPO. By comparison, New York-listed Ferrari shares will trade more than 35 times their estimated earnings in 2018, according to Thomson Reuters, compared to around 7.3x earnings forecast for Stoxx Europe 600 automobiles & Parts Index.

Understandably, Who's Who of Wall Street is involved in the Aston Martin IPO. Lazard acts as a financial adviser to the company, while Deutsche Bank, Goldman Sachs and JPMorgan Securities arrange the sale. You can understand the excitement, but should you buy it when it happens? Here are things that are worth considering before you take the plunge:

The Car Company's Worrying Financial History

While the latest financial figures for H1 2018 look good, with sales up 8% £ 449.9 million and an operating profit of 17% to £ 64.4 million, the company's problems in the past, including a series of bankruptcies and ownership chain should not be forgotten.

During its 105-year history, Aston Martin has filed for bankruptcy no fewer than seven times, and has had several owners including Ford. It is currently controlled by Investindustrial Advisors Ltd and Kuwaiti Investment Dar.

The company has said that existing investors will sell shares in the IPO, which will result in approximately 25% of the company's stock trading on the London Stock Exchange. Daimler, the manufacturer of Mercedes-Benz, also holds a stake of 4.9% and intends to hold it in the event of a possible stock market listing. But current stakeholders should comfort the potential IPO enthusiasts to continue the good work of recent years.

At the same time, the volatility of the luxury car market – which Aston Martin has been following in the past – should falter. Again, a declining public assessment would lead to open tinkering rather than closed-ended remedies, and the results could vary widely. In a related analogy with a very different kind of automaker – Elon Musk's discomfort with a publicly listed Tesla illustrates this.

The Man in the Lead

While Aston Martin's worrying financial past should be a cause Given the concerns of potential investors, the recent performance of the company was impressive. The turnaround began in 2014 when Andy Palmer, a former Nissan board member, took over as Chief Executive Officer.

Andy Palmer, CEO of Aston Martin, poses for a photo in DB11 sports car. (Photo: Kentaro Takahashi / Bloomberg)

Palmer stabilized a rocky ship and its production rates should rise to 7,300 cars next year. That's the highest value since the 2009 global financial crisis. Palmer has also been launching new models such as the upcoming DBX Sports Utility Vehicle (SUV) in 2019 and the popular DB11

which is looking at a range of electric vehicles that are based on the Ultra Luxury segment, and increase production to around 14,000 units a year in the not too distant future. It seems the management is doing an impressive job. While this may be an advantage, the IPO will not provide Aston Martin with additional capital to increase its production.

As the global financial crisis has shown, sales of luxury cars are correlating with economic booms and busts. The global economy is working hard right now, but nobody can guarantee that, and how Palmer and his team react to a future global slump still needs to be tested.

Expansion, Ambition and Brexit

Some commentators believe that Aston Martin's planned expansion could lead to a dilution of his mark. That's a very volatile assumption. The company was pretty sure that much of its expansion was aimed at relocating more units in lucrative Asian markets, increasing sales in the region from 16% to 25% without affecting the European and North American outlets.

Overall, Aston Martin says it is targeting sales of 6,200 to 6,400 units this year, up from 9,800 units by 2020, when a new plant in Wales goes into production. Even if it falls short of the stated short- to medium-term production stimulus by 10%, if margins are maintained, the profit is expected to increase over the next three to four years.

The steering wheel of an Aston Martin DBS Superleggera model. (Photo: Chris Ratcliffe / Bloomberg)

Of course, Brexit is on the horizon. Like all UK assembly lines relying on parts of the European Union (EU), Aston Martin is subject to Brexit, although Palmer claimed in a BBC interview on Wednesday that his company was "impenetrable".

In the same interview, Palmer admitted that Aston Martin is amassing engines with partial German components in preparation for "post-Brexit limit delays". But he added that while the company exports 25% of its cars to the EU, it would benefit from a weaker pound. It remains to be seen how all this will end, but it is a risk that every potential Aston Martin shareholder should consider.

Conclusion: For Petro – Heads, Fans and Those After a Piece of British Car Driver [19659001] If, and there remains a big If Aston Martin achieves its £ 5 billion target rating, then it would be the luxury carmaker within reach from the British Blue Chip Index – the FTSE 100 put. Does the company deserve this stature on branding alone? Does it still have much to prove? Probably not!

Overall, earnings and revenue should rise, but the stock is unlikely to be a high-yield affair unless its aggressive expansion into emerging luxury automobiles fails to materialize. But it's unlikely that petroleum cows, Aston Martin fans and those looking for a slice of a unique British brand will be behind some of the finest cars on the road to buying their stock.

Of course, room for cautious optimism with Aston Martin. But for potential mainstream investors, focusing on financials should be much more important than branding.


Source link