Market Overview

Ford's Stock Has Best Day In 7 Years After Delivering Results Where It 'Matters Most'

Ford's Stock Has Best Day In 7 Years After Delivering Results Where It 'Matters Most'

Ford Motor Company (NYSE: F) reported mixed third-quarter results Wednesday, but that didn't stop investors form buying up the stock.

Shares closed higher by 9.9 percent at $8.99. That's the biggest move for the stock since Aug. 9, 2011, when shares jumped about 10 percent from $9.78 to $10.80.

Ford's stock hasn't closed in double-digit territory since Aug. 8, hurt by higher rates and tariffs. Here's what Street analysts are saying after the print.

The Analysts

  • Buckingham Research Group's Joseph Amaturo maintains a Neutral rating on Ford with a price target lowered from $10 to $9.
  • Morgan Stanley's Adam Jonas maintains at Equal-Weight; unchanged $10 price target.
  • Jefferies' Philippe Houchois maintains at Buy; unchanged $13 price target.

Jefferies: Ford Delivered Where It 'Matters Most'

Ford reported multiple encouraging metrics in areas where it "matters most," Houchois said in a note. They include:

  • EBIT 10 percent ahead of consensus estimates.
  • Three-percent revenue growth to $37.7 billion.
  • A slight EPS beat at 27 cents.
  • Strong performance in North America despite negative net pricing, along with higher commodity and warranty costs.
  • A solid contribution from the credit side of the business.

Several poor metrics that Ford reported were anticipated, including weak performance in Europe and a "low point" in China, the analyst said.

Ford impressed in areas where it mattered most against "low and falling" expectations, which warrants a bullish stance on the stock, according to Jefferies.

Buckingham's Concerns Over Cost Cutting

Several aspects of Ford's third-quarter report were a welcome surprise, including an 8.8-percent EBIT margin in the North American business, while the Ford Motor Credit Co. showed a strong profit that prompted a $600-million quarterly dividend from the subsidiary, Amaturo said in a note.

Ford's free cash flow would have been negative $500 million excluding the dividend, which warrants a cautious stance toward the quality of accrual earnings, the analyst said.

Ford didn't offer any specific details regarding its cost-cutting and restructuring initiatives, Amaturo said. The company plans on saving $36 billion over time, but the absence of any new color warrants a cautious stance, he said.

Morgan Stanley: 'Some Relief'

Ford's report offers investors "some relief" and should ease negative sentiment and declining expectations, Jonas said in a note. The results come at a time when Ford continues to create new partnerships, finalize restructuring initiatives and generate new value-enhancing ideas, he said.

The stock's upside reaction Thursday shouldn't come as a surprise, although it should not be considered "the big inflection" point to support continued upside, the analyst said. Ford's balance sheet is "holding together" and the nearly 7-percent dividend yield appears to be safe, Jonas said.

Related Links:

What China Means For Ford And Tesla

7 Reasons Morgan Stanley Pulled Back On Ford

Photo courtesy of Ford.

Latest Ratings for F

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

View More Analyst Ratings for F
View the Latest Analyst Ratings


Related Articles (F)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings News Price Target Top Stories Analyst Ratings Movers Trading Ideas Best of Benzinga

Latest Ratings

URIVertical ResearchInitiates Coverage On310.0
PCARVertical ResearchInitiates Coverage On95.0
DEVertical ResearchInitiates Coverage On345.0
CNHIVertical ResearchInitiates Coverage On16.0
AGCOVertical ResearchInitiates Coverage On119.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
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