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Ford Motor Company (F), headquartered in Dearborn, Michigan, with a market cap of $41.3 billion, is a global leader in automotive design and manufacturing. Known for its innovation and commitment to quality, Ford offers a diverse range of vehicles, from fuel-efficient cars to cutting-edge electric and commercial vehicles, catering to the needs of individuals, businesses, and industries.
Companies valued at over $10 billion are typically classified as “large-cap stocks,” a category Ford exemplifies through its substantial market presence and leadership in the global automotive industry.
Ford shares are currently trading 30% below their 52-week high of $14.85, hit on July 18. Over the past three months, the stock has declined 2.2%, underperforming the Consumer Discretionary Select Sector SPDR Fund's (XLY) 22.7% gain during the same period.
Over the past 52 weeks, F stock has declined 6.9% and is down 14.8% on a YTD basis, significantly underperforming the XLY, which has gained 34.7% over the past year and 31.2% on a YTD basis.
Ford has been trading below its 50-day and 200-day moving averages since late July, indicating a bearish trend.
Ford's underperformance stems from margin pressures, flat sales, and challenges adapting to the EV transition amid macroeconomic and supply chain issues.
On Oct. 28, Ford's shares rose over 2% following its Q3 earnings report, which surpassed market expectations. The company delivered revenue of $46.2 billion, a 5.5% year-over-year increase and beating the analyst's estimates of $42.3 billion. Adjusted EPS reached $0.49, slightly ahead of the $0.47 consensus. Notably, free cash flow margin improved to 7.6% from 5.4%, despite sales volumes remaining flat year-over-year.
Its rival, General Motors Company (GM), is significantly outperforming F, as evidenced by a rise of 56.5% over the past year and 45.6% on a YTD basis.
Analysts are cautious about Ford due to its recent price performance. The stock has a consensus "Hold" rating from 20 covering analysts. It has a mean price target of $11.81, indicating a potential upside of 13.7% from its current level.
