Shares in Aston Martin Lagonda Global Holdings PLC (LON:AML) skidded in late-afternoon after JP Morgan cut its target price to 1,500p from 1,800p.
In a note, the US investment bank said the car maker's pricing power for its lower-cost vehicles could come under pressure in its 2019 fiscal year, which could affect as much as 15% of its sales.
READ: Aston Martin ‘more like BMW than Ferrari’ according to Deutsche Bank
Analysts also highlighted a “softening” of demand for premium models across Europe, citing low-single digit declines over the last five months as opposed to four years of “straight line growth” since 2015.
The bank also forecast that a lack of output in the first quarter from the group’s DBX luxury SUV model as well as higher depletion and amortisation (D&A), would “take a toll” on its first quarter results, and as such cut their earnings forecasts for the full year by 10%.
JP Morgan’s analysts aren’t the only ones expecting lower earnings from Aston Martin, with Deutsche Bank saying they saw a “risk to earnings in 2019” as a result of “muted demand momentum” and increasing costs due to ramp-ups at the company’s St Athan manufacturing plant.
Shares were down 0.6% at 931.4p.
