The Aston Martin (LSE: AML) share price is facing a make-or-break year in 2021. And I’m optimistic the changes the group’s bought in over the past 12 months will be enough to return it to growth in the year ahead.
Aston Martin share price outlook
This time last year, there were questions about whether or not Aston Martin could survive for the next 12 months.
Ever since its IPO, the organisation has lurched from one disaster to another. A lack of strategy and weak balance sheet seemed to be holding the group back. Analysts questioned whether or not the business would be able to put aside any concerns about its future and convince investors to lend it more money to keep the lights on.
After trying to raise money unsuccessfully, luckily the group then found a backer in Canadian businessman Lawrence Stroll. The involvement of this billionaire convinced other investors to provide additional cash. He also decided to take a hands-on approach, moving onto the board of the car marker as part of its restructuring.
During 2020, there were several significant changes to Aston’s management structure. As noted above, the company’s saviour came on board as chairman. The group also acquired a new CEO, Tobias Moers.
Moers, who was formerly at Mercedes, replaced Andy Palmer who had been with the business since 2014.
Aston is now led by a chairman who has a reputation for turning around luxury goods brands, and a CEO who has a reputation for making high-performance cars for one of the most respected manufacturers in the world. So I’m incredibly optimistic about the future of the Aston Martin share price under this duo.
By all reports, Aston has lacked the sort of luxury goods experience Stroll has brought to the business. Previous management also reportedly spent too much time focusing on growth, rather than quality.
That’s where Moers should be able to help.
New management
Another shadow that has dogged the Aston Martin share price for years is funding. The firm has fallen into bankruptcy no less than seven times. After its recent fundraising, the group’s now well capitalised. And one of its largest shareholders, Stroll, has deep pockets and significant connections. His involvement should help remove questions about the company’s solvency.
Therefore, I think 2021 could be the year the turnaround finally starts at Aston Martin. I’m going to be keeping a close eye on the company’s costs and sales figures over the next 12 months. If they’re heading in the right direction, I reckon the business could be at the beginning of a multi-year growth spurt.
Demand for luxury cars has only increased over the past 10 years, and this tailwind could help accelerate the company’s growth spurt. And if the business shows it’s managed to stabilise the ship, investor sentiment could rapidly improve. That may lead to a substantial increase in the Aston Martin share price.