TLDR
- Ford stock returned +2.6% over the past month, outperforming both the S&P 500 (-7.7%) and the automotive industry (-26.5%)
- Earnings estimates for Ford have been revised downward, with current fiscal year EPS projected at $1.43 (a 22.3% year-over-year decrease)
- Last quarter, Ford reported $44.9 billion in revenue (3.7% year-over-year increase) and beat analyst expectations
- New aluminum tariffs announced by President Trump are expected to negatively impact Ford and GM
- Despite economic headwinds, Ford is trading at a discount compared to peers with a Zacks Value Style Score of A
Ford Motor Company (NYSE: F) has demonstrated resilience in a challenging market environment. The American automaker has managed to outperform both the broader market and its industry peers over the past month.
Ford shares have increased by 2.6% over the last month. This performance stands in stark contrast to the S&P 500’s decline of 7.7% during the same period.
Even more impressive is Ford’s ability to buck the trend within its own industry. The automotive sector has experienced a substantial downturn, with the Zacks Automotive – Domestic industry falling 26.5% over the past month.
This outperformance comes despite downward revisions to Ford’s earnings estimates. Analysts currently expect Ford to post earnings of $0.05 per share for the current quarter, representing an 89.8% decrease from the same period last year.
The consensus estimate for Ford’s current fiscal year earnings stands at $1.43 per share. This indicates a year-over-year decline of 22.3%.
Looking ahead to next fiscal year, analysts project earnings of $1.56 per share. This would represent a 9.3% increase from current year expectations.
These projections have seen modest revisions recently. The current fiscal year estimate has decreased by 2.3% over the last 30 days, while next year’s projection has actually increased by 1.9%.
Quarterly performance exceeded analyst expectations
Ford’s most recent quarterly performance exceeded analyst expectations. The company reported revenues of $44.9 billion, representing a year-over-year increase of 3.7%.
Earnings per share for the last quarter came in at $0.39, compared to $0.29 during the same period a year ago. This exceeded the Zacks Consensus Estimate by 14.71%.
Over the past four quarters, Ford has beaten earnings expectations twice and revenue projections three times. This track record of outperforming analyst estimates has helped maintain investor confidence.
From a valuation perspective, Ford appears to be trading at a discount compared to its peers. The company has received a Zacks Value Style Score of A, indicating favorable valuation metrics relative to other companies in its industry.
However, Ford faces headwinds from recent policy changes. New aluminum tariffs announced by President Trump are expected to negatively impact both Ford and General Motors.
Jim Cramer, the well-known CNBC host, commented on these tariffs, stating they would “hurt really badly” both Ford and GM. He suggested this could push consumers toward the used car market.
At the same time, Cramer noted that the President’s actions indicate support for domestic automakers like Ford and GM. This mixed message creates uncertainty about the net impact of these policies on Ford’s business.
The broader economic environment presents additional challenges. Consumer behavior is changing, with shoppers becoming more careful about their spending and attempting to stretch their dollars further.
This evolving consumer sentiment comes amid conflicting economic signals. Inflation has decreased for the second consecutive month, marking the first such occurrence since 2020.
Complex economic backdrop
However, market reaction to this positive inflation news has been muted due to concerns about tariffs and recession fears. This represents the complex economic backdrop against which Ford must operate.
For investors considering Ford stock, the company currently holds a Zacks Rank #3 (Hold). This suggests that in the near term, Ford may perform in line with the broader market.
The auto industry faces transformation on multiple fronts – from electric vehicle adoption to supply chain challenges and changing consumer preferences. Ford’s ability to navigate these complexities will be crucial to its future performance.
As of the most recent trading day, Ford stock was up 1.95%, showing continued momentum despite the challenging economic landscape.
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