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3 Things Auto Investors Should Know About Ford's F-150 Production

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3 Things Auto Investors Should Know About Ford's F-150 Production

Deutsche Bank recently released a report on Ford Motor Company (NYSE: F) after analysts attended Ford's F-150 event in New York. The report includes a breakdown of analysts' three major takeaways from the event.

1. Production Going Smoothly

The major ramp-up in F-150 production seems to be on track so far. The Dearborn, Michigan, facility is now at full run rate after only three months, and Kansas City is beginning F-150 production this week.

2. Consumers Willing To Pay Up

Management indicated at the meeting that they are confident that the F-150's premium price will not discourage buyers. Ford management added that three-year residual values for F-150s are at 58 percent, higher than both General Motors Company (NYSE: GM)'s Silverado (51 percent) and Fiat Chrysler Automobiles NV's (NYSE: FCAU) Ram (46 percent).

Specifically, the difference in residual value between F-150s and Silverados is about $6,000, a number that analysts believe business fleet buyers will take note of.

Related Link: Kansas City Assembly Plant Comes On Line As Second U.S. Factory Building All-New Ford F-150

3. Ford Positioned To Further Ramp-Up Production

Once operations in Kansas City get fully up and running, Ford will have the capacity to produce a huge number of F-150s. According to the report, Ford sold 603,000 F-150s in 2014. So far in 2015, Ford's run rate projects to 619,000 for the year.

However, analysts believe that Kansas City will push Ford's capacity to over 700,000 units. Analysts see this massive volume level creating upside for Ford's earnings projections and possible downside for Ford's competitors.

Outlook

Overall, analysts see near-term strength for U.S. auto companies, but have a more cautious outlook for the long-term. Deutsche Bank has a Hold rating on Ford and a $16.00 target for the stock.

Image credit: Wiki Commons

Latest Ratings for F

DateFirmActionFromTo
Aug 2019UpgradesEqual-WeightOverweight
Jun 2019Initiates Coverage OnOutperform
May 2019UpgradesNeutralBuy

View More Analyst Ratings for F
View the Latest Analyst Ratings

Posted-In: Deutsche Bank F-150 RAM SilveradoAnalyst Color Analyst Ratings Best of Benzinga

 

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