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Ford Authority

Ford Stock Upgraded To ‘Equal Weight’ By Morgan Stanley

As Ford Authority reported last week, Wells Fargo recently downgraded Ford stock from “buy” to “sell” over concerns that recent spikes in raw materials costs for EVs may squash any hopes that those vehicles will soon cost the same as comparable ICE models “by at least a decade.” However, it seems as if Wall Street analysts are split on that particular topic, as rival finance giant Morgan Stanley took the opposite approach and upgraded Ford stock from “underweight” (or sell) to “equal weight (hold), which led to a bit of a late-week resurgence, according to Motley Fool.

That move came as Ford’s freewill landed its stock below the $13 mark following a month-long sell-off, which also positioned it below Morgan Stanley’s price target for the first time in 18 months. By the end of the week, Ford stock closed at $13.50, quite the rebound, though it remained below the previous week’s closing price of $14.21. However, there’s a bit more to the story, as Morgan Stanley values Ford stock at anywhere from $5 to $25, depending largely on how/if the supply chain recovers in the coming months and years.

As Motley Fool points out, Ford’s current stock price does make it seem like a bit of a bargain, as it’s paying investors a three percent dividend and it’s currently priced at 4.7 times the company’s earnings. That means the automaker doesn’t need to grow its earnings very much at all to justify the current stock price, and it’s also expected to double its free cash flow by 2026, which would make today’s price seem like a bargain by comparison.

While analysts remain split on how Ford’s stock will perform moving forward, a lot hinges on the prices and availability of raw materials. As Ford Authority reported last month, EV battery costs are expected to soar by as much as 40 percent over the next two years, while at least one of the automaker’s suppliers – CATL – has already announced that it will be raising prices soon.

We’ll have more on the status of Ford’s stock soon, so be sure to subscribe to Ford Authority for ongoing Ford stock news and around-the-clock Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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