Equities Update: Aston Martin, Next, GSK and more

Aston Martin Lagonda stuck in reverse gear

Mark Crouch, analyst at eToro says: “When you think Aston Martin, you think of class and quality. A closer look under the bonnet however reveals a luxury car maker struggling to keep up. Aston Martin reported bigger-than-expected losses as well as falling production numbers this morning, and not for the first time.

Fine margins separate sports cars on the track, yet as businesses, Aston Martin and their rivals are miles apart. Ferrari shares have recently hit new highs while Aston’s seem stuck in reverse falling over 40% in 2024. Mounting losses and inefficiencies are an all-too-common occurrence for the company, taking the shine off highly anticipated releases of the new Vantage, DBX and upcoming V12 model.

It will feel like a now-or-never moment for Aston Martin shareholders, who have suffered crippling losses since the 2018 IPO. Right now, it’s too early to tell whether these new editions will be enough to turn the company’s fortunes around, but by the looks of these results, the signs don’t look good.”

Next maintains profit guidance after strong start to the year

Adam Vettese, analyst at eToro says: “Next seems to be the gift that keeps on giving as they deliver an increase in sales for Q1 that has come in ahead of expectations. They have been cautious about raising the full-year outlook due to a particularly warm Q2 last year and as a result anticipate a potential dip upcoming in comparison.

Whilst the macro outlook has certainly improved, there may be some risk factors for retailers, as some uncertainty lingers, but it is still fair to say that Next is a pick of the sector. Despite a slight dip in the share price this morning which could well be a bit of profit taking, there is still scope for the price to push on this year.”

GSK hikes profit targets on strong pipeline

Adam Vettese, analyst at eToro says: “GSK seems to be picking up more momentum this year with better-than-expected sales performance and full-year profit forecast being lifted to the upper end of its range, particularly showing strong demand for its shingles vaccine which continues to perform well.

Whereas previously, pipeline was a concern for the company, their move to focus more heavily on vaccines is proving to be a smart one with several new launches on the pipeline. This has been a reason the firm has lagged behind sector peer AstraZeneca in recent times, but GSK actually has its nose in front in terms of performance this year.

The company now needs to deliver on these punchier numbers to keep the share price pushing on to make a run for the 1700p level and beyond. A small bump in the dividend will appease investors as they eagerly await further progress.”

Premier Inn owner Whitbread reports record profits 

Mark Crouch, analyst at investment platform eToro comments: “Premier Inn owner Whitbread has today reported record profits as the hospitality giant looks to build on their enduring wave of post pandemic momentum.

“The leading light for the company, Premier Inn, continues to steal the show reporting record cash flows and profits, while Whitbread are at last making headway on the continent as Premier Inn Germany revenues were up and set to break even in 2024.

“Shareholders will be getting a significant bump up of the dividend and the company is set to complete further share buy backs. 

“There were a handful of snags though. The performance of Whitbread’s Beefeater and Brewers Fayre have become something of a burden. The effects of higher food inflation now mean so many of us opt to eat in, heavily impacting the restaurants. As a result, a proportion of the sites are due to be sold and a larger number set to be converted into expansions of the high-flying Premier Inn.

“Whitbread’s share price has been dragged down to a 12-month low and with Premier Inn doing all the heavy lifting, this move seems to make sense and will likely lighten the load and hopefully lift the price. “ 

Card Factory greets shareholders with resumed payouts

Adam Vettese, analyst at investment platform eToro comments: “The high street is a tough battleground for any business in the current environment. Add to that the fearsome online competition in the greetings card market and you could say Card Factory is very much up against it. Despite this, profits have increased 25% with strong performance in store and some marked recovery in what was a lagging online offering with ‘Click and collect’ being a contributing factor.

“The highlight of the update and most likely cause for celebration for shareholders is the resumption of dividend payments at 4.5p per share. Whilst a welcome additional bit of income, there will be some investors out there who are holding Card Factory from its pre pandemic highs and still see a long way to go.

“The forward guidance has remained unchanged but there are things to be positive about. The company is taking steps to control and reduce debt whilst also promoting growth with a new store rollout plan and partnerships to boost revenue further.”