27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Ford Motor Company (NYSE:F) hyped investors last June by announcing a Volkswagen partnership. Now, that tie-up has become a drag.
The Rating
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Morgan Stanley analysts Adam Jonas, Harald Hendrikse and Armintas Sinkevicius maintained an Equal-Weight rating on Ford with a $10 price target.
The Thesis
The analysts were cautioned by Volkswagen’s reported valuation of Ford’s mobility business. Volkswagen is preparing to take a 50-percent stake in Argo AI with a $600 million equity investment. A $1.1 billion investment in working capital and R&D will follow.
“VW’s reported valuation of Ford’s robotaxi business, while in line with our $1 billion valuation in our SOTP model, is well below many other market estimates, far below GM Cruise, and we believe potentially well below Ford’s expectations for the value of the business,” the analysts wrote in a note.
The rate falls short of the partners’ previously discussed valuation nearing $4 billion, according to Bloomberg. For further comparison, Morgan Stanley values GM Cruise at $9 billion.
Want Private Access to Benzinga Analyst?
Check out the latest strategies our team of experts are using every week so that you can always adapt to the market like the pros!—Get FULL Access to This Week's Webinar Here.
“If true, a $1.2 billion value for 100% of Argo would mark a ‘calming down’ moment for investor excitement around the value of autonomous car assets,” the analysts wrote.
To Morgan Stanley, Volkswagen’s investment also demonstrates the limits of Ford’s partnership.
“As our European team expected, the WSJ article suggests VW did not want to invest significant capital into a business it didn’t have full or joint control over,” they wrote. “...There had been a great deal of hype and high expectations for Ford and VW on numerous strategic fronts (CVs, EVs, SVs,and AVs) that overall has not appeared to live up to the bar set by the market.”
Price Action
At time of publication, Ford shares traded down marginally at $8.80.
Related Links:
Morgan Stanley: Ford-VW Alliance Won't Amount To Merger
Goldman Sachs Upgrades Ford To Buy, Restructuring Plan Yields Favorable Opportunities
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.