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Dearborn, Michigan-based Ford Motor Company (F) develops, delivers, and services a range of trucks, commercial cars, vans, sport utility vehicles, and Lincoln luxury vehicles worldwide. With a market cap of $42.2 billion, Ford Motor operates through the Ford Blue, Ford Model E, Ford Pro, Ford Next, and Ford Credit segments. The automaker is expected to release its third-quarter earnings after the market closes on Monday, Oct. 28.
Ahead of the event, analysts expect Ford to report a profit of $0.50 per share, up 28.2% from $0.39 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS projections thrice over the past four quarters while missing on one other occasion. Its adjusted EPS for the last reported quarter declined 34.7% year-over-year to $0.47 and missed the consensus estimates by 26.6%.
For fiscal 2024, analysts expect Ford to report an adjusted EPS of $1.88, down 6.5% from $2.01 in fiscal 2023. However, in fiscal 2025, its adjusted EPS is expected to grow 2.7% to $1.93.
Ford has dipped 13.3% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 20.6% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 10.8% returns during the same time frame.
Share of Ford Motor plummeted 18.4% after the release of its Q2 earnings on Jul. 24. Although the company’s revenue grew 6.3% year over year to $47.8 billion, its rising expenses led to a notable drop in profit margins. Its already low operating margins contracted by 1.5% annually to 3.9%, while its net margin contracted by 43 basis points to 3.8%, raising concerns regarding the company's operation efficiency. This has led to a 4.5% drop in net income to shareholders, falling to $1.8 billion.
Shares of Ford fell further 4.1% on Sep. 25 after Morgan Stanley (MS) analyst Adam Jonas downgraded Ford from an "Overweight" to an "Equal-Weight" while cutting its price target from $16 to $12 due to concerns over falling prices and growing competitive threats, particularly from Chinese automakers.
The consensus rating on F stock is neutral, with an overall “Hold” rating. Out of the 20 analysts covering the stock, six recommend “Strong Buy,” 11 suggest “Hold,” and three advocate “Strong Sell.”
The mean price target of $12.86 suggests a potential upside of 21.7% from current price levels.
On the date of publication, Aditya Sarawgi 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.
