Market Overview

Is Ford Set For A Big Holiday Season?

Is Ford Set For A Big Holiday Season?
  • Despite strong October sales numbers, Ford Motor Company (NYSE: F) fell short of peers.
  • News of Ford’s end-of-year sale leaked in late October, and buyers likely delayed purchases as a result.
  • The delayed purchases could drive Fords November/December sales even higher.

Despite recording its best October sales in 11 years, Ford’s 13.4 percent October growth fell a bit short of rivals Fiat Chrysler Automobiles NV (NYSE: FCAU) (+14.7 percent) and General Motors Company (NYSE: GM) (+15.9 percent). However, according to AutoTrader analyst Michelle Krebs, there may be good reason for Ford’s relative underperformance, and it could lead to a huge holiday sales season for the company.

The Leak

According to Krebs, the big October numbers for Ford could have been even bigger if word of the company’s November sale hadn’t gotten out early. “The sales increase wasn’t quite what some analyst had predicted, possibly because word leaked out late last week that Ford would launch a massive promotion starting Nov. 3,” she told Benzinga.

Related Link: These Analysts Aren't Concerned About Ford

Friends & Neighbors

The big promotion, which Ford calls “Friends & Neighbors,” slashes up to 10 percent off of new models’ manufacturer’s suggested retail price. This discount typically puts prices within $200 of the invoice price of the vehicle. However, the biggest part of the deal for buyers could be the fact that the offer can be added on to other Ford incentives, allowing buyers to compound their savings.

“Ford’s Friends & Neighbors promotion that runs through the end of the year basically gives consumers supplier pricing,” Krebs explained.

End-Of-Year Kick

While the sale itself could be a big driver for Ford sales in November and December, Krebs believes that the early leak could explain why Ford’s October numbers fell short of peers. “The last weekend of the month is always a big one for sales, so sales may have been suppressed a bit because consumers wanted to see what the Ford deals would be,” she told Benzinga.

Krebs predicts that some of the late-October buyers may have delayed purchases so they could get in on the deal, and that Ford investors can expect “big sales” from the company through the end of the year.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for F

May 2019UpgradesNeutralBuy
May 2019MaintainsMarket PerformMarket Perform
Apr 2019DowngradesNeutralReduce

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