Market Overview

Ford's Bad News Has Been Sufficiently Priced In Over Last 6 Months

Share:
Ford's Bad News Has Been Sufficiently Priced In Over Last 6 Months

Jefferies has upgraded Ford Motor Company (NYSE: F) to Hold from Underperform, saying the automaker’s “bad news has been more than dissected in the last six months and sufficiently priced-in.”

Despite acknowledging cyclical risks, analyst Philippe Houchois noted that Ford’s earnings would benefit the most among the "Detroit Three" from infrastructure spending, border adjusted tax reform and exposure to a Russian auto recovery.

Beyond The Borders

Ford's above average exposure to light and medium duty work vehicles, most of them sourced in the United States, which bodes well in an environment of infrastructure spending. Unlike General Motors Company (NYSE: GM), Ford also retained exposure to Russia, which should help Ford Europe this year.

On the border adjustment tax front, the analyst estimates Ford has the lowest risk among U.S. exposed OEMs with 80 percent of US sales volume sourced domestically and U.S. exports/imports balancing out in value.

“We estimate a cost penalty <$500 per vehicle vs estimated $2,000 industry average,” Houchois elaborated.

Other Companies

Earlier this month, Barclays’ Brian Johnson too upgraded Ford, saying the automaker seems better positioned than GM and Fiat Chrysler Automobiles NV (NYSE: FCAU) in a border adjusted tax scenario.

Meanwhile, Ford shares have under-performed sector and GM by 15 percent in 2016, with. 2017 consensus EPS estimates falling 23 percent since June.

“Ford's challenges are sufficiently priced-in and risk is slowly moving to the upside,” Houchois added.

Shares of Ford closed Thursday’s trading at $12.38. Houchois raised his price target by $2 to $12.

Latest Ratings for F

DateFirmActionFromTo
Oct 2019DowngradesBuyHold
Oct 2019MaintainsNeutral
Oct 2019MaintainsNeutral

View More Analyst Ratings for F
View the Latest Analyst Ratings

Posted-In: Analyst Color News Emerging Markets Upgrades Price Target Politics Travel Markets Best of Benzinga

 

Related Articles (F + FCAU)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
TORCCantor FitzgeraldDowngrades3.0
CIDMCanaccord GenuityMaintains1.5
TDGCanaccord GenuityMaintains620.0
DLPNCanaccord GenuityMaintains1.6
WBCLSADowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Activision Blizzard Storms To New All-Time High

Wall Street Consensus On Twitter: Sell The Stock