Although Barclays’ Brian A. Johnson expects OEM stocks to outperform suppliers in the near term, negative data points are likely to lead to volatility, with Ford Motor Company F underperforming in the very near term, driven by a weaker outlook.
Johnson maintains an Equal-Weight rating on the company with a price target of $12.
Future Strategy
On its investor day, the analyst expects Ford to provide more information on its future strategy of Smart Mobility.
“Yet, while the strategy may provide us with greater comfort of Ford's role in a world of #disruptivemobility, we are concerned it will be overshadowed by a disappointing '17 outlook — which may rule the day for the stock,” Johnson mentioned.
The analyst also expects the company to offer more clarity on its technology portfolio in autonomous and electrification.
Guidance
The analyst expects the company to provide its 2017 guidance at the investor day next week, with management already having set the bar lower for 2017 at the Q2 earnings call.
“We see the biggest source of weakness from NA, with profits contracting by $1.2 billion, and with margin compression of 110bp down to 8.4 percent,” Johnson noted.
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