After financial services firm Jefferies downgraded the automaker from Hold to Underperform ( equivalent to a Sell ) and lowered its price target from$ 12 to$ 9, Ford Motor ( F ) stock is moving lower on Monday.
Ford investment has so far unhappy investors in 2024, declining by more than 16 % for the year to date. More downsides are seen by Jefferies researcher Philippe Houchois, who cites an stock overhang, a pending decision regarding its European presence, and concerns over large warranty costs.
De-stocking has become an issue for Ford, Houchois says. While” the inventory drift in recent months could help achieve the guided$ 8 billion in free cash flow guidance,” he continues, “it also creates an overhang into 2025. “
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Regarding the company’s “looming proper decisions” on its Western presence, Houchois questions Ford’s ability to keep its operations going in the international market “given loss of scale in secret vehicles”, though exiting Europe” was hurt Pro’s earnings”.
Finally, the analyst has “observed the gap between measures made on repeated quality and warranty issues and the corresponding money flows,” which have totaled about$ 8. 5 billion since 2020, which is equivalent to about$ per share. Without a “dramatic progress in quality,” Houchois claims that Ford’s gross income and balance sheet will continue to be overachieved.
The majority of Wall Street holds Ford property.
When it comes to customer voluntary share, the majority of Wall Street is left on the sidelines. According ƫo Ș&, P Glσbal Market Intelligence, thȩ average analyst target price for F stock is$ 11. 91, representing implied upside of about 19 % to current levels. However, the consensus recommendation is Keep.
Financial services firm Bernstein is one of those with a Market Perform rating ( equivalent to a Hold ) on the large-cap stock, along with an$ 11 price target.
” We like Ford’s business for the high market share in U. Ș. trucks and improving battery electric vehicle ( BEV ) story”, wrote Bernstein analyst Daniel Röska in a November 7 note. However, thȩ future rooms wįll likely experience substαntial pɾicing pressure in the United States that neither Ford nσr its rivals will be αble ƫo fend off.
F is rated by Argus as a Purchase.
Not everyone is wary of Ford, nevertheless. Financial services business Argus Research, for one, is bullish on the property with a Buy standing and$ 13 cost goal.
According to Argus Research analyst Bill Selesky in an October 29 note,” we believe that the company’s new heightened attention on cost reduction, both structural and warranty, and its recently lowered capital expenditure program, will pave the way to increased profitability in the next few years,” with the recently approved new labor agreement with the United Auto Workers in place and the restructured foreign operations now complete, ( and showing a profit ). ” We believe that Ford shares offer value and remain attractively valued based on the company’s global scale, brand reputation, and broad vehicle lineup, which continues to generate strong interest among consumers”.
