Share Prices & Company Research


20 September 2018

Time to invest in the lap of luxury?

This year has so far proven an exciting time for investors with a taste for the finer things in life.

Becoming an Aston Martin owner has become that little bit easier for some as today (20th September 2018) the luxury carmaker publishes its IPO prospectus including full details of the company. The carmaker is targeting a valuation of between £4.02bn and £5.07bn, setting a price of £17.50 - £22.50 per share.

In the first instance, shares can only be purchased by eligible employees, customers and members of the Aston Martin Owners club who reside in the UK, with retail investors able to buy them when they become available on the secondary market.

As well as purchasing sports cars, Rolex watches or Jimmy Choos, those hoping to find ways of accessing luxury goods may also consider investing in this sector.

Elizabeth Pindar, Investment Executive, said: “Shares in luxury good suppliers have rocketed this year, partially due to the strong demand from the Chinese consumer. The market has rebounded from economic uncertainty and geopolitical crises, with annual sales nearing $1tn at the end of 2017.

“Italy is the leader in a number of luxury goods companies, whereas companies in France have the highest share of sales, helping the French stock market to outperform its European peers over the summer months.
“Chinese consumers account for around a third of all luxury purchases globally, so trade tensions between US and China and a slowdown in the Chinese economy could darken the outlook for the luxury market.”

Many individual stocks in the sector, such as Louis Vuitton Moet Hennessy (LVMH) and Hermes, are listed on overseas exchanges but can be accessed by UK investors. Elizabeth added: “Ferrari, Hermes and LVMH are all examples of luxury stocks who have pricing power within their market. If you were to walk into a shop and request to buy a Ferrari or Hermes handbag, you would often be told that you could go on the waiting list and for a Hermes handbag, this could be as long as five years. In 2014, around 60% of all Ferraris were sold to customers who already own a Ferrari; existing owners are offered stock first as they try keep their customer base small to create an air of exclusivity.

“Luxury goods are in demand and the rise in social media helps to compound this growth as consumers turn to Instagram to show off their latest purchase.”

Shares in Aston Martin are expected to begin conditional trading on the London Stock Exchange on 3rd October 2018, with Aston Martin expected to announce its final pricing on or around this date. Around 25% of the company’s stock is expected to be floated.

Unconditional trading is expected to begin on or around 8th October 2018.

Please remember, investments and income arising from them can fall in value and you may lose some or all of the amount you have invested. Past performance and forecasts are not reliable indicators of future results or performance.

Our view does not constitute a recommendation to invest in any of the investments mentioned.


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