The value of Ford stock increased during the July 20th, 2020 – July 24th, 2020 timeframe. Shares closed the week at $6.88 per share, which represents an increase of $0.08 per share, or more than 1 percent, compared to the prior week’s closing value of $6.80.
The results represent four consecutive weeks of growth.
Movement & Ranges
For the sake of comparison, shares of Ford’s cross-town rival – General Motors Company – fell $0.20 per share, or less than 1 percent – during the July 20th, 2020 – July 24th, 2020 timeframe.
Ford Stock Factors
Ford stock has seen historically-low values during the COVID-19 pandemic, with some being the lowest recorded values in over a decade. Last week’s value of $6.88 leaves Ford shares $2.54 lower than than the $9.42 per share at which Ford stock opened the 2020 calendar year.
It would seem that this week’s gains coincided with the reveal of the all-new 2021 Ford Bronco and 2021 Ford Bronco Sport. The limited-production First Edition model of the Bronco two-door and four-door sold out in just a few hours, causing Ford to double availability. The Bronco Sport sold out in less than two days. Both models have seen substantial interest, causing massive traffic spikes on automaker’s website.
That said, expectations of the upcoming release of The Blue Oval’s Q2 2020 earnings, set to be reported this week, on July 30th, may have an unfavorable impact on the value of Ford shares. During its Q1 2020 earnings call, the Dearborn-based automaker predicted a loss of up to $5 billion for the second quarter, primarily as a result of factors associated with COVID-19.
The COVID-19 pandemic caused Ford production to be idled for roughly two months, partially resulting in Ford’s $2 billion loss for Q1 2020. With the opening of all plants and steady sales, The Blue Oval could perform better than expected. A wave of upcoming desirable and profitable new products should also help turn the time.
Besides the Bronco and Bronco Sport, Ford also recently unveiled the all-new 2021 F-150 – its most profitable and revenue-generating product. The all-new pickup truck features a significant amount of updates and new features, along with an all-new exterior and interior. The 2021 F-150 is expected to see a gradual rollout before hitting full stride in roughly two or three quarters following the start of production.
Prior to the reveals of the F-150 and Bronco family, Ford and Volkswagen signed off on a new partnership wherein both automakers will develop and produce several vehicles around the world. Additionally, the tie-up will see VW investing several billion in Argo AI, an autonomous software firm backed by Ford.
Ford During COVID-19
The Coronavirus pandemic forced Ford to idle production across North America, South America, Europe and China, putting the firm in a very disadvantageous position. The scenario resulted in a steep decline in revenues and an accelerated burn in cash, resulting in a loss-making scenario for Ford (or for any automaker, for that matter)
Ford production in China resumed in March, Ford Europe production started back up on May 4th and most North American Ford production resumed on May 18th. The restart in production hasn’t been without a completely smooth endeavor, as various facilities were forced to pause production for up to 24 hours for cleaning and area disinfection after workers tested positive for COVID-19.
Ford has taken major steps to steer through the COVID-19 pandemic. The automaker’s actions have primarily revolved around reducing and/or deferring expenses and shoring up cash. To that end, Ford suspended its dividend while borrowing $15.4 billion in March before borrowing another $8 billion in April.
While it was taking all of these actions during idled vehicle production, The Blue Oval has been producing shields, face masks, and respirators to help medical workers fight the virus on the front lines. Ford will continue making the PPE, at an accelerated pace in some instances, now that vehicle production has restarted.
Ford is also helping suppliers get through the trough created by the pandemic by paying its bills ahead of schedule.
In May, 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.
Ford Stock Before COVID-19
Ford Motor Company’s business health had several business-related issues well before the global COVID-19 outbreak, including lack of profitability in several key vehicle lines and in international regions, along with quality issues in critical product launches. To that end, Ford CEO Jim Hackett replaced Joe Hinrichs with Jim Farley as COO, allegedly due to major issues associated with the rollout of the all-new 2020 Ford Explorer and Lincoln Aviator – two key models that come at a 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 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 to optimize the fitness of its business. These actions include 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.
It’s worth noting that 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 late 2020, the very first units of the all-new Ford Mustang Mach-E will begin arriving at dealers. The Mach-E is an electric, four-door crossover inspired by the legendary Mustang pony car. The vehicle represents the direction in which Ford is moving as a company and where it’s taking its vehicle lineup.
The Mustang Mach-E also demonstrates that Ford isn’t afraid to redefine legendary nameplates. 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.