Ford Motor (F) stock is trading in positive territory Tuesday after Goldman Sachs upgraded the embattled automaker to Buy from Hold.
Goldman's upgrade of Ford is centered around the possibility of improving profitability, according to Barron's, particularly within its commercial business.
"We believe there is a margin opportunity driven by the company's more profitable commercial business," says Goldman Sachs analyst Mark Delaney. Ford's commercial business, Ford Pro, is its most profitable unit.
The analyst also provided positive commentary on Ford's growing software and services mix.
"The company is targeting $1 billion of software revenue in 2025, and for software and physical services to be 20% of Pro [operating profit] in 2026," Delaney said. "In addition, we believe cost actions – in internal combustion engines (ICE) and electric vehicles (EVs) – can help to offset industry headwinds."
Is Ford stock a buy, sell or hold?
Ford Motor shares down more than 26% since mid-July and Wall Street is on the sidelines when it comes to the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for F stock is $13.02, representing implied upside of over 20% to current levels. Meanwhile, the consensus recommendation is a Hold.
But like Goldman Sachs' Delaney, there are bulls to be found. Financial services firm BofA Securities, for instance, also has a Buy rating on the large-cap stock, along with a $20 price target.
"On August 21, Ford announced several changes to its product plans that should help improve the profitability and capital efficiency of its Core to Future transition," says BofA Securities analyst John Murphy. "Among the changes, Ford now plans to launch a new electric commercial van in 2026 and two new electric pickup trucks in 2027."
Murphy adds that Ford's initiatives include shelving plans "to build an electric three-row SUV, but instead will leverage its hybrid technology in the next three-row SUVs." He believes "these changes will position Ford to benefit from growing demand for EVs, while also focusing on areas in which it has a Core competitive advantage."
BofA's $20 price target is the highest on Wall Street and sits nearly 90% above where Ford is currently trading.
