The brokerage said that Ford is focusing on number of factors like data analytics, mobility, autonomous and electrification. That did not deter the company in maintaining its pre-tax profit target of approximately $10.2 billion for the current year, $9.7 billion in 2017 and $10.8 billion in 2018.
Although it might be a disappointing outlook near term, UBS believes the company is investing to be more competitive in the sector. "Ford took a more bullish view toward EV adoption, forecasting about 64 percent of vehicles will be hybrid or EV by 2030 and committing $4.5 billion to developing 13 new EV models by 2020. They see cell costs at only $120/kwh by 2020 and only $95/kwh by 2025," the analyst told clients in a note.
Another factor is transportation-as-a-service (TaaS). Ford expects TaaS to cost $1.00 per mile compared to $2.50 a mile for Uber and $0.70 a mile for individual ownership. The brokerage sees AV representing 20 percent of fresh sales by the turn of 2030 as the company is slated to launch in 2021.
Therefore, the analyst maintains his Buy rating and $16 target price.
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