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Saturday, December 5, 2020

Aston Martin stock price rotates lower to erase yesterday’s gains

  • Mercedes Benz will increase its stake up to 20% to become one of the bigger stakeholders in Aston Martin
  • Aston Martin aims to sell 10,000 vehicles annually, nearly double compared to the last year’s figure
  • Shares of Aston Martin initially erupted nearly 20% before rotating lower to erase all gains

Shares of Aston Martin (LON: AML) are trading around 4% lower on the day as the buyers struggled to hold onto gains recorded yesterday in the morning. 

Fundamental analysis: A major deal announced

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Daimler’s Mercedes-Benz agreed to increase its stake in Aston Martin to further reinforce current collaboration between the two-car producers. Mercedes Benz will increase its stake up to 20% to become one of the bigger stakeholders in the British carmaker. 

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According to the terms of the agreement, Aston Martin will gain a certain degree of access to Mercedes’ electric and hybrid powertrains. This way, Aston Martin can push on with its plans to produce its own electric vehicles (EVs).

Aston Martin says that the agreement will include “powertrain architecture (for conventional, hybrid, and electric vehicles) and future-oriented electric/electronic architecture for all product launches through to 2027.”

The deal is expected to help Aston Martin to reach its target of selling about 10,000 vehicles, nearly double than 5,862 vehicles sold last year, by 2025 and generate around £2 billion in revenue. The target for EBITDA is £500 million The British carmaker sold 5,862 vehicles last year.

“Through this new expanded agreement, we secure access to world-class technologies to support our long-term product expansion plans, including electric and hybrid powertrains, and this partnership underpins our confidence in the future,” said Lawrence Stroll.

“This is truly game-changing. We now have the right team, partner, plan, and funding in place to transform the company to be one of the greatest luxury car brands in the world.” 

Technical analysis: Risk sentiment weighs on

Shares of Aston Martin initially erupted nearly 20% to trade at £0.6460, which is the highest level since the mid-August. However, the sellers managed to erase nearly all of these gains and push the stock to close only 0.92% in the green yesterday.

Aston Martin stock price rotates lower to erase yesterdays gains
Aston Martin daily chart (TradingView)

The deteriorating risk sentiment continued to weigh on AML as losses from yesterday afternoon mounted for stock to hit £0.5250 and trade about 4% lower. A close below £0.5633 – the 200 DMA – will only increase the bearish pressure on buyers. 


Aston Martin stock price has continued lower today after rotating lower yesterday afternoon to erase all gains facilitated by a new partnership agreement with the German car giant Mercedes Benz.

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