Ford Motor Company F is among the legacy automakers transitioning to the industry's shift to green energy vehicles. Impressed with Ford's execution so far, an analyst at Credit Suisse upgraded shares of the company.
The Ford Analyst: Dan Levy upgraded Ford's stock from Neutral to Outperform and increased the price target from $15 to $20.
The Ford Thesis: Over the past year, Levy says a significant turnaround is underway at Ford. The automaker ended its cycle of quarterly disappointments and its transition to an EV/digital world has sharply accelerated, he said.
There is more opportunity ahead for Ford, as it remains poised to benefit not only from improving fundamentals, but more importantly, changing its perception on long-term positioning in EV/AV/digital, Levy said.
CEO Jim Farley, who took over the reins late last year, has positioned Ford on the right track.
Ford has moved more quickly and with greater urgency, both of which are necessary in the transition to an EV world and digital model, Levy said. The analyst now has increased confidence in the company's financial outlook.
"We believe this fundamental shift at Ford will be at the core of improving long-term perception," Levy wrote in a note.
A favorable cycle, alongside benefits from self-help actions such as product, cost, international improvement, can keep Ford compelling from a near-term financial / cycle standpoint, the analyst said. This will also ensure that Ford's secular transition plans will be amply funded.
Ford has shown a more holistic EV strategy and traction on product and the F-150 Lightning launch next spring could be a catalyst, the analyst said. On AV, Ford's stake in AV startup Argo could drive upside to Ford's valuation.
F Price Action: In premarket trading, Ford shares were edging up 0.32% to $15.47.
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