Aston Martin (LON: AML) share price jumped sharply on Thursday after the company received a new investment from Geely. The stock jumped to a high of 288.5p, the highest point on March 8. It has jumped by over 30% from the lowest level this year.
Geely boosts Aston Martin stake
Aston Martin Lagonda has made two major headlines this month. Earlier this month, the company announced relatively encouraging financial results. Its revenue jumped by 27% to £295.9 million in Q1. The company made £237 million in the same quarter in 2022.
Aston Martin sold 1,269 vehicles in the quarter while its adjusted EBITDA came in at £30 million. Its operating loss rose by £3 million while the management committed to becoming profitable in 2025.
The other important Aston Martin Lagonda news was the decision by Geely to add to its investment in the company. It acquired 43 million more shares in the company from Lawrence Stroll’s consortium. It was also issued with additional shares at 335p, which is much higher than the current level.
Geely now owns 17% of Aston Martin, making it one of the biggest holders of the stock. The others are Saudi Arabia and Lawrence Stroll’s consortium. Therefore, as the company adds to its stake, some investors hope that the company will make a bid for the firm,
This is likely since Geely has long been interested in Aston Martin. There are reasons for this. For one, the company makes highly popular cars. For example, 95% of all its GT/Sports have been sold out for 2023. Its other luxury brands have also been sold out.
Also, the company is motivated by the growth of the luxury sector as evidenced by the success of Porsche, Ferrari, and French companies like LVMH and Hermes.
Aston Martin share price forecast
AML chart by TradingView
In my last article on Aston Martin, I wrote that the shares would drop to about 179p. This view did not work out as the shares jumped to 285p on Thursday. The shares are approaching the important resistance level at 307p, the highest point in March.
The stock is attempting to form a double-top pattern, which is usually a bearish sign. The neckline of this pattern is at 201.2p, the lowest point on May 12. Therefore, the outlook of the stock is neutral for now. More upside will be confirmed if the shares move above the double-top point at 307p.
The post Aston Martin share price popped: Is it a good buy now? appeared first on Invezz.
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