Ford Motor Company Faces Market Challenges Despite Earnings Boost
With a market capitalization of $39.5 billion, Ford Motor Company (F) develops a range of vehicles, including trucks, SUVs, commercial vans, and Lincoln luxury vehicles. Headquartered in Dearborn, Michigan, Ford also provides financial services through Ford Credit, which facilitates vehicle financing and leasing.
Typically, companies with valuations of $10 billion or more are categorized as “large-cap stocks,” and Ford certainly qualifies. With a market cap exceeding this threshold, Ford stands out in the automobile industry due to its strong brand reputation, global reach, and extensive manufacturing capabilities. The company’s proficiency in mass production, coupled with advanced manufacturing techniques and supply chain efficiency, enhances its competitive position.
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Ford has seen a 32.9% decline from its 52-week high of $14.85, which was attained on July 18, 2024. Its stock has decreased by 5.7% in the past three months, though this is notably better than the 6.8% drop experienced by the First Trust S-Network Future Vehicles & Technology ETF (CARZ) during the same period.
Year-to-date, Ford’s shares have shown slight growth, outperforming CARZ, which has declined by 5.4%. However, reviewing a longer time frame reveals a disappointing 18.2% drop for Ford over the last 52 weeks, significantly worse than CARZ’s 6.6% decrease.
Ford’s stock began trading above its 50-day moving average in March, indicating a potential bullish trend. Nevertheless, it has remained below its 200-day moving average since late July 2024.
On March 5, the company’s shares rose 5.8% after the Trump administration announced a one-month delay on tariffs for automakers whose vehicles comply with the United States-Mexico-Canada Agreement.
Ford reported its Q4 earnings on February 5, with revenue hitting $48.2 billion. This figure represents a 4.8% increase compared to the same quarter the previous year and surpasses consensus estimates by 5.5%. The company’s adjusted earnings per share (EPS) rose by 34.5% year-over-year to $0.39, exceeding the Wall Street forecast of $0.34.
Despite the strong earnings report, Ford’s shares fell 7.5% the following day. Investors were particularly concerned about the company’s fiscal guidance for 2025, which outlines an adjusted EBIT of $7 billion to $8.5 billion and an expected adjusted free cash flow between $3.5 billion and $4.5 billion. This forecast takes into account potential market challenges, which may have lowered investor confidence.
In comparison to its competitor General Motors Company (GM), Ford has underperformed. GM’s shares have risen 21.7% over the past 52 weeks, while Ford has experienced a 9.7% decline year-to-date, but it has surpassed GM’s overall decline in the same period.
While Ford has shown recent strength against its sector peers, analysts maintain a cautious stance on the company’s outlook. Among the 22 analysts following Ford, the consensus rating stands at “Hold.” The average price target of $10.29 suggests a modest 3.3% upside from current levels.
On the date of publication, Neharika Jain did not hold positions in any securities mentioned in this article. For additional details, please refer to the Barchart Disclosure Policy here.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
