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Ford Motor Company (F), headquartered in Dearborn, Michigan, develops, delivers, and services a range of Ford trucks, commercial cars and vans, sport utility vehicles, and Lincoln luxury vehicles. Valued at $43.6 billion by market cap, the company also provides vehicle-related financing, leasing, and insurance.
Shares of this automaker have underperformed the broader market considerably over the past year. F has gained 13.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.9%. In 2024, F stock is down 7.9%, compared to the SPX’s 25.8% rise on a YTD basis.
Narrowing the focus, F’s underperformance looks more pronounced compared to the First Trust Nasdaq Transportation ETF (FTXR). The exchange-traded fund has gained about 40.6% over the past year. Moreover, the ETF’s 21.4% gains on a YTD basis outshine the stock’s single-digit losses over the same time frame.
Ford's underperformance can be attributed to struggling in both the electric vehicle market and traditional internal combustion engine market. Its pre-tax losses in the EV segment are expected to widen to around $5 billion this year, and it has scaled back its ambitious EV plans. Management noted weaker consumer sentiment, sales-mix shifts, and intensifying electric vehicle competition as significant headwinds in Q4. Additionally, higher costs and warranty expenses have hindered Ford's earnings potential.
On Oct. 28, F shares closed up more than 2% after reporting its Q3 results. Its revenue of $46.2 billion beat analyst estimates of $42.3 billion. The company’s adjusted EPS was $0.49, surpassing analyst estimates of $0.47.
For the current fiscal year, ending in December, analysts expect F’s EPS to decline 9.5% to $1.82 on a diluted basis. The company’s earnings surprise history is mixed. It beat or matched the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 20 analysts covering F stock, the consensus is a “Hold.” That’s based on five “Strong Buy” ratings, 12 “Holds,” and three “Strong Sells.”
This configuration is less bullish than a month ago, with six analysts suggesting a “Strong Buy.”
On Nov. 7, Bernstein downgraded F to “Market Perform” with a $11 price target.
The mean price target of $11.85 represents a 5.5% premium to F’s current price levels. The Street-high price target of $19 suggests an ambitious upside potential of 69.2%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
