TLDR
- Ford Motor (F) stock has declined 5.1% over the past month, underperforming the S&P 500’s 2.3% drop
- The company is expected to post a loss of $0.01 per share for the current quarter, a 102% year-over-year change
- Analysts have downgraded forecasts, with consensus earnings estimates for fiscal year down 19.2% over the last 30 days
- Several analysts have downgraded Ford from “hold” to “underperform” with price targets reduced
- Despite underperformance, Ford reported better-than-expected results last quarter with EPS of $0.39 versus $0.35 estimated
Ford Motor Company has been attracting significant investor attention recently despite facing a challenging market environment. The automaker’s stock has experienced notable volatility over the past month amid changing analyst sentiment and revised earnings projections.
The stock has declined 5.1% over the past month, compared to the S&P 500’s more modest 2.3% drop during the same period. This performance gap widens when looking at the broader automotive sector, as the Zacks Automotive – Domestic industry has fallen by 23.1%.
Ford’s recent trading patterns show continued pressure. On Tuesday, March 4, shares fell 2.5%, trading as low as $9.07 before closing at $9.16. This represents a decline from the previous close of $9.39.
The company’s valuation metrics present a mixed picture for investors. Ford currently has a market capitalization of approximately $36.21 billion. Its price-to-earnings ratio stands at 6.26, with a price-to-earnings-growth (PEG) ratio of 0.61.
These figures suggest the stock may be trading at a discount relative to peers. This assessment is supported by the Zacks Value Style Score, which gives Ford a grade of A, indicating potential undervaluation compared to industry competitors.
Analyst sentiment has turned increasingly cautious in recent months. Multiple firms have downgraded their outlook on Ford shares. Jefferies Financial Group reduced Ford from a “hold” to an “underperform” rating while cutting their price target from $12.00 to $9.00 in December.
Similarly, Barclays downgraded Ford from “overweight” to “equal weight” in January, lowering their target price from $13.00 to $11.00. Wells Fargo also reduced their price target, dropping it from $9.00 to $8.00 while maintaining an “underweight” rating.
The current analyst consensus shows a predominantly neutral stance. According to MarketBeat, Ford has three “sell” ratings, ten “hold” ratings, and four “buy” ratings. The average price target stands at $11.89, suggesting some potential upside from current levels.
Looking at earnings projections, Ford is expected to post a loss of $0.01 per share for the current quarter. This represents a significant reversal, reflecting a 102% year-over-year change. Over the past month, the consensus estimate has been drastically reduced by 102.7%.
For the full fiscal year, analysts project earnings of $1.37 per share, indicating a 25.5% decline from the previous year. This estimate has been lowered by 19.2% over the last 30 days. Looking further ahead, estimates for the next fiscal year suggest a 9.2% improvement to $1.50 per share.
Revenue projections also paint a challenging picture for the near term. For the current quarter, analysts expect sales of $35.51 billion, representing an 11% year-over-year decline. Full-year revenue is projected at $166.15 billion, down 3.8% from the previous year.
Ford’s most recent quarterly results exceeded expectations
Despite these headwinds, Ford’s most recent quarterly results exceeded expectations. The company reported revenue of $44.9 billion, representing 3.7% year-over-year growth and surpassing the consensus estimate by 3.04%. Earnings per share came in at $0.39, beating the expected $0.35 and showing improvement from $0.29 in the same period a year ago.
This marks a trend of relative outperformance against estimates. Over the past four quarters, Ford has beaten consensus EPS projections twice and exceeded revenue expectations three times.
Ford continues to return capital to shareholders through its dividend program. The company recently paid a quarterly dividend of $0.15 per share on March 3 to shareholders of record as of February 18. This translates to an annualized dividend of $0.60 and a yield of approximately 6.57%.
Institutional investors have shown mixed activity regarding Ford shares. While some funds have established new positions, others have adjusted their holdings. Notable recent investments include Universal Beteiligungs und Servicegesellschaft mbH, which acquired a position worth approximately $19.2 million.
Ford’s current technical indicators suggest continued pressure. The stock is trading below both its 50-day simple moving average of $9.76 and its 200-day simple moving average of $10.41, typically considered bearish signals by technical analysts.
For investors considering Ford, the company’s Zacks Rank #4 (Sell) suggests potential underperformance relative to the broader market in the near term, though its valuation metrics indicate possible long-term value.
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