Ford’s Upcoming Earnings: Can It Match GM’s Success?

The countdown is underway. In just five days, on Monday, May 5, Ford Motor Company (NYSE: F) will report its Q1 2025 earnings. The company aims to replicate the earnings beat achieved by its main competitor, General Motors, last Tuesday. Will Ford rise to the occasion?

Analyzing Ford’s Q1 Earnings Expectations

Experts have set a low bar for Ford. According to analysts surveyed by Yahoo! Finance, Ford is projected to earn just $0.02 per share to meet expectations. This is significantly less than the $0.49 per share reported in the same quarter last year. Even if Ford sees a 10% decline in revenue, it can still hit its target. Analysts forecast that Ford will report sales around $35.8 billion.

General Motors’ impressive sales and earnings growth raise the stakes for Ford. With expectations for Ford’s performance dampened, the threshold for exceeding them is notably low. Analysts believe Ford has a good chance of surpassing these projections.

Potential Challenges for Ford

However, it’s important to note that Ford could still miss its earnings targets. Current trade policies under President Trump have introduced significant uncertainty in the automotive sector. Although GM managed to exceed expectations, Ford’s outcomes are not guaranteed.

Additionally, Ford could undermine a solid earnings report by providing conservative guidance for Q2 or the remainder of the year. Such predictability might deter investors regardless of the earnings outcomes. A cautious approach could be warranted, given the unpredictability of tariff effects, as highlighted by a recent warning from Bank of America.

Image source: Getty Images.

Investment Considerations for Ford

Despite the uncertainty, many believe Ford stock is a strong buy ahead of the upcoming earnings report. The stock price has seen minimal movement recently; it started April at $10.03 per share and closed the month at $10.01. Given the heightened uncertainty in the automotive sector, this stability suggests the stock may be near its lowest point.

Ford’s valuation further supports this viewpoint. The stock currently trades at only seven times its trailing earnings, which is lower than valuations for both GM and Toyota. Notably, Ford’s dividend yield stands out at 7.4%, significantly higher than GM’s 1.3% and Toyota’s 2.7% yields.

The company’s payout ratio is approximately 53%, indicating that Ford can maintain its substantial dividend effectively.

While the future impact of tariffs remains uncertain, consumer demand for vehicles is unlikely to dwindle. This suggests Ford’s business model remains sound, and the dividend payout is secure. As a result, many analysts view Ford stock as a compelling buy ahead of the earnings announcement.

Is It Time to Invest $1,000 in Ford?

Before purchasing shares in Ford Motor Company, note that investment analysts have recently identified several stocks they believe may yield better returns. Ford did not make this list of top investment candidates.

The analytical team suggests focusing on industries that may currently provide higher growth potential than Ford.

The evaluation of Ford’s current stock positioning, coupled with expected market developments, remains a point of interest for investors as earnings reporting approaches.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.