The value of Ford stock increased during the May 4th, 2020 – May 8th, 2020 timeframe. Shares closed the week at $5.24 per share, which represents an increase of $0.32 per share, or about 7 percent, compared to the prior week’s closing value of $4.92.
Movement & Ranges
For the sake of comparison, shares of Ford’s cross-town rival – General Motors Company – grew $3.03 per share, or nearly 15 percent – during the May 4th, 2020 – May 8th, 2020 timeframe.
Ford Stock Factors
Ford share values continued to see historic lows amid the COVID-19 pandemic, with recent values being among the lowest recorded in over a decade. The current value of $5.24 is nearly half of the $9.42 per share value that Ford stock opened the 2020 calendar year.
On a more positive note, this week’s increase marks the second consecutive week of growth for Ford stock values. Interestingly, the rebound occurred after Ford released its Q1 2020 earnings, which was headlined by a loss of two billion dollars. The automaker initially anticipated about $600 million in losses, but subsequently revised that figure to be closer to the actual $2 billion. The Blue Oval also warned that it could lose up to $5 billion in Q2 2020 if things do not improve and production does not restart. Another point of interest is the fact that Ford COO Jim Farley bought $1 million in Ford stock, making it the largest open-market share purchase by a Ford executive in a decade.
The Coronavirus has forced Ford to temporarily idle vehicle production in North America and South America, along with Europe and China, while suspending its dividend as it borrows $15.4 billion in March as well as another $8 billion in April. A circumstance wherein Ford (or any other automaker, for that matter) does not produce any vehicles presents a very unfavorable situation for the firm, causing revenues to fall sharply, resulting in a loss-making turn of events.
Early last week, Ford outlined its plans to re-open U.S. plants and begin producing vehicles. The automaker has since confirmed that production will resume on May 18th. Meanwhile, European production resumed on May 4th while Chinese production resumed in March.
When trying to understand where the Ford stock might be headed, it’s worth noting that Ford Motor Company was having issues prior to the global COVID-19 outbreak, including lack of profitability in several key vehicle lines and in various international markets, along with quality issues in key product launches. To that end, Ford CEO Jim Hackett replaced Joe Hinrichs with Jim Farley as COO, allegedly due to major issue associated with the rollout of the all-new 2020 Ford Explorer and Lincoln Aviator – two key models coming to market at a rather critical time, given the popularity of crossovers and SUVs.
Ford announced even more changes to its executive ranks in late April. The changes, made by recently-appointed COO Jim Farley after a 10 week-long deep dive, were presented as a way to “better serve customers, streamline decision-making and increase accountability.”
Coronavirus-related items aside, we remain interested in seeing how Ford stock will perform throughout the rest of 2020, especially in light of various actions taken by the Dearborn-based automaker throughout 2019 and into 2020. The company has taken steps to optimize its business by discontinuing all sedans to focus on more profitable crossovers, SUVs, and pickup trucks in North America, while at the same time investing in resource-intensive autonomous vehicle technologies like its Argo AI autonomous service as well as electric vehicles. Both initiatives have yet to result in a positive ROI for any automaker.
The Blue Oval started both efforts much later than its direct rivals. For instance, FCA was the first to discontinue most of its sedan portfolio and General Motors started to invest heavily into EVs and autonomous vehicles much earlier than The Blue Oval. In July 2019, Ford announced details of its partnership with Volkswagen that would result in VW investing in Ford’s Argo AI venture.
In November 2019, The Blue Oval announced the new Ford Mustang Mach-E – an electric, four-door crossover inspired by the legendary Mustang pony car. Set to go on sale in about a year, the vehicle represents the direction in which Ford is going as a company and where it’s taking its vehicle lineup.
The Mustang Mach-E also demonstrated that Ford isn’t afraid to upend legendary nameplates. Initially, Ford stock didn’t see any movement in value following the announcement. However, the automaker sold out the introductory Mustang Mach-E First Edition variant, which is a promising development, if it should serve as an indicator of future Ford share values.
In 2020, Ford plans to launch a new F-150 pickup. Set to launch toward the end of the 2020 calendar year as a 2021 model, the 2021 F-150 will likely see a slow rollout before hitting full stride in roughly two or three quarters following job one. The Dearborn-based automaker will also reveal two new additions to its utility lineup – the Bronco Sport, which is colloquially referred to as the “baby Bronco”, as well as the larger Ford Bronco. The former will go into production in September, while the latter will begin production in early 2021. All three all-new models are expected to deliver positive contributions to FoMoCo’s bottom line.