Aston Martin IPO values James Bond’s favorite car brand at $5.6 billion

Aston Martin is becoming a member of the ranks of listed automakers with an IPO that values the British firm at greater than $5 billion. But its first day of buying and selling in London received off to a rocky start.

The favorite carmaker of fictional British secret service agent James Bond priced its shares at £19.00 ($24.70), giving it a valuation of £4.3 billion ($5.6 billion).

The last itemizing worth is 16% beneath the top quality that Aston Martin had focused, reflecting investor doubts about whether or not the carmaker ought to be valued within the same league as Italian rival Ferrari.

Shares dipped almost 5% in London buying and selling.

In going public, the British firm is asking traders to beat fears about US threats to tax international autos and the potential for Britain’s deliberate exit from the European Union to disrupt supply chains and markets.

Aston Martin, which has a historical past of chapter filings, is now producing healthy earnings.

It bought greater than 5,000 vehicles in 2017, its finest efficiency in 9 years. That generated document income of £876 million ($1.1 billion), a rise of almost 50% over the earlier yr.

Earnings for the primary half of this yr present that momentum has continued. Revenue was up 8% over the identical interval a yr earlier, whereas revenue elevated 14%, in keeping with the numbers that had been revealed final month.

Aston Martin has in recent times sought to capitalize on its high-end brand. But analysts at Bernstein see a number of potential issues.

They argue the Aston Martin brand is just not as robust as that of Ferrari (RACE), which is bolstered by a long time of racing historical past and a slew of Formula 1 championships. The British automaker additionally has a lot tighter margins than its Italian rival and a worrying historical past of uneven gross sales.

With cash raised from the IPO earmarked for current shareholders relatively than funding within the firm, Aston Martin executives may very well be pinning an excessive amount of hope on the success of a deliberate SUV.

“Given its current financials and apparently rather less robust demand, it’s a big stretch for us to see how it can possibly match Ferrari’s profitability,” analysts at Bernstein wrote lately. “We can’t see it getting anywhere close.”

Aston Martin’s house owners embody Mercedes-Benz father or mother Daimler (DDAIF), non-public fairness firm Investindustrial and traders based mostly in Kuwait.

CNNMoney (London) First revealed October 3, 2018: 4:38 AM ET