Market Overview

Analysts Ponder Ford Motor's Future Following Investor Day

Analysts Ponder Ford Motor's Future Following Investor Day

Wall Street is mixed on Ford Motor Company (NYSE: F) after its Investor Day suggested the automaker is investing in the future at the expense of near-term profitability. But, analysts appear more concerned on near-term performance not future endeavors, further indicating that the stock should be flat or down in the coming quarters.

Ford, which is focusing on electric vehicles, autonomous, mobility, and data analytics, is still targeting pre-tax profit of about $10.2 billion in 2016, $9.3 billion in 2017 and $10.8 billion in 2018.

Ford will make a huge investment in electric vehicles, targeting $4.5 billion through 2020 to launch 13 new electric vehicles and sees about 64 percent of vehicles will be hybrid or EV by 2030.

Related Link: Could The Internal Combustion Engine Lose Dominance To Electric Vehicles? Ford Thinks So

Voices From The Street

  • UBS: "They see cell costs at only $120/kwh by 2020 and only $95/kwh by 2025. This compares to GM's cell cost of $145/kwh with the launch of the Bolt this year and $100 target by 2025, and our $105/kwh ($155 with pack) estimate by 2025," UBS analyst Colin Langan wrote in a note.
  • UBS maintains its Buy rating and $16 price target.

  • CLSA: Analyst Emmanuel Rosner also maintains his Outperform rating and $13 price target on the stock. But, the analyst is surprised that the company attributed 2017 decline in earnings to large investments in emerging opportunities (EV, autonomous, mobility) as opposed to cyclical pressures.
  • "While investors can be encouraged by Ford's proactive efforts to adapt its business model, stock performance is likely to remain tied for now to Ford's nearer-term outlook, especially amid concerns about the US auto cycle; as such, another year of declining earnings could limit upside potential," Rosner noted.

  • Deutsche Bank: Unlike the previous two analyst's reiterated Outperform/Buy ratings, Deutsche Bank analyst Rod Lache remains on the sidelines, citing mounting profitability headwinds over the intermediate term. The upcoming capex could further pressure free cash flow, while the analyst expects additional pressures from regulatory compliance, light truck capacity and used vehicle prices by 2018.
  • "Earnings risks appear to be skewed to the downside, even vs. Ford's below consensus guidance (e.g. we're more cautious than Ford on North American demand/pricing, China pricing)," Lache added.

    Shares of Ford closed Thursday's trading at $12.11. At time of writing Friday, the stock was down 0.25 percent at $12.08.

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    Latest Ratings for F

    Nov 2020Morgan StanleyDowngradesOverweightEqual-Weight
    Nov 2020UBSMaintainsNeutral
    Nov 2020JefferiesMaintainsBuy

    View More Analyst Ratings for F
    View the Latest Analyst Ratings


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