Market Overview

A New Bull Case For Ford Sees More Than 100% Upside

Share:
A New Bull Case For Ford Sees More Than 100% Upside
Related F
Ford Motor Buys Michigan Central Station: 'It's Time To Remake This Into A Place Of Possibility Again'
A Look Back At What's Happened To Each Sector Through The First Half Of 2018 (Part 1)
GE Booted From The Dow, Trump Threatens China Trade War Escalation (Wall Street Breakfast Podcast) (Seeking Alpha)

If things go right for Ford Motor Company (NYSE: F), things could go really, really right. By Morgan Stanley’s estimates, the stock could pop from $12 to $25 — a rate unseen since 2001.

To be sure, Morgan Stanley isn’t confident that things will go right and, mindful of the downside, maintains an Underweight rating on the stock.

But the firm’s paying attention.

“We are keeping an open mind and looking for an opportunity for better entry point, potentially following some necessary steps in the sequence of events leading up to an eventual turnaround effort,” analyst Adam Jonaswrote in a Tuesday note.

How Things Could Be

Ford has not fully articulated its restructuring plan, but Jonas is watching for the automaker to:

    1. Exit Europe and its limited international operations.
    2. Sell its Chinese joint ventures.
    3. Cut loss-incurring units.
    4. Diminish small and midsize car programs or non-U.S. Finco assets.
    5. Commit electric Lincolns to the Chariot ride-hailing service.
    6. Fund pension liabilities.
    7. Partner with or acquire software players.
    8. Produce all cars with Level 1 or 2 autonomous capabilities.
    9. Or, store all data in Ford Smart Mobility in preparation for partner use.

Regardless of its route, the firm appears ready for motion.

“We see Ford’s 3Q as a prelude to further strategic changes, potential capital raising, restructuring, and business realignment,” Jonas wrote. “The headwinds facing Dearborn are significant, and we see scope for an equally significant response.”

tipranks.png

How Things Are On Track To Be

Based on third-quarter results, Morgan Stanley raised its price target from $9 to $10 and its EPS estimates for 2017, 2018 and 2019 from $1.54 to $1.82, from 94 cents to $1 and from 75 cents to 92 cents, respectively.

“Ford is going through a transitionary period where we see scope for near-term fundamentals to bring consensus forecasts down materially,” Jonas wrote, noting risk in macroeconomic factors.

Related Links:

Ford Shares Under Pressure

Ford Higher On Better-Than-Expected Auto Sales

Latest Ratings for F

DateFirmActionFromTo
May 2018JefferiesUpgradesHoldBuy
May 2018PiperJaffrayDowngradesOverweightNeutral
May 2018Morgan StanleyMaintainsOverweightOverweight

View More Analyst Ratings for F
View the Latest Analyst Ratings

Posted-In: Analyst Color Short Ideas Price Target Reiteration Travel Analyst Ratings Trading Ideas General Best of Benzinga

 

Related Articles (F)

View Comments and Join the Discussion!