UK's Aston Martin forecasts fiscal 2025 profit below market consensus

Luxury carmaker Aston Martin (AML.L) has warned of a full-year loss that will exceed market consensus, citing softer wholesale volumes and economic pressures from tariffs and a newly implemented quota system. The company now anticipates a mid-high single-digit percentage decline in its 2025 wholesale volumes from last year's 6,030 units and no longer expects positive free cash flow generation in the second half of this year, indicating a significantly weaker financial outlook than previously projected by analysts.

Analysis

Oct 6 (Reuters) - Luxury carmaker Aston Martin (AML.L) warned on Monday of a full-year loss that would be bigger than market consensus, citing softer volumes and economic pressures stemming from tariffs and a newly implemented quota system. The British carmaker now expects its 2025 total wholesale volumes to fall by mid-high single digit percentage from last year's 6,030 units. Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here. At the low end, analysts had expected Aston Martin to log an operating loss of 110 million pounds ($147.83 million), according to estimates compiled by the company. Advertisement · Scroll to continue The company said it no longer expects positive free cash flow generation in the second half of this year. Reporting by Raechel Thankam Job in Bengaluru; Editing by Subhranshu Sahu Our Standards: The Thomson Reuters Trust Principles. Aston Martin has issued a significant profit warning, signaling that its full-year loss will be greater than the market consensus, which at the low end anticipated an operating loss of £110 million. The company attributes this negative outlook to softer wholesale volumes and economic pressures, specifically new tariffs and a recently implemented quota system. Consequently, Aston Martin now projects its 2025 wholesale volumes will decline by a mid-to-high single-digit percentage from the previous year's 6,030 units. Critically, the guidance also reversed expectations for positive free cash flow in the second half of the year. This combination of declining sales, widening losses, and a negative cash flow forecast indicates a rapid deterioration in the company's financial health, driven by both weakening demand and external macroeconomic headwinds.

Key Decisions for Investors

• Investors should reassess their valuation models for Aston Martin to incorporate a wider-than-expected loss and negative free cash flow, which materially increases the company's risk profile.
• Given the forecast for declining volumes and persistent headwinds from tariffs, it is prudent to consider reducing long exposure or employing hedging strategies to mitigate potential further downside.
• Monitor upcoming management commentary for specific strategies to address the challenging trade environment and stabilize cash burn, as the current outlook presents significant operational and financial uncertainty.