mobile-menu-icon
Ford Authority

Ford Stock Downgraded As Recession Fears Loom

Following its meteoric rise that coincided with Jim Farley being named CEO later in 2020, Ford stock has taken a pretty big hit recently amid various supply chain constraints, rampant inflation, and general recessionary fears. In the last couple of weeks in September, Ford stock declined by 16 percent and nine percent, respectively, before jumping back up seven percent last week. However, things aren’t getting off to a great start this week as UBS Group AG – an investment bank – has downgraded Ford stock as a recession likely looms, according to Seeking Alpha.

UBS downgraded Ford stock from “Neutral” to “Sell” amid rising concerns over a recession not only in the U.S., but also in Europe. Analysts are predicting that this financial outlook, along with a resulting decrease in consumer demand for new vehicles, will more than compensate for the good things that FoMoCo has been doing that previously gave Wall Street a more bullish take on the company – things such as its commitment to EVs and reducing costs and complexity across the board.

“Ford ranks behind Stellantis and GM in terms of North American EBIT margins and in light of the likely recession, has the highest risk of testing break-even points, in our view,” UBS wrote in its analysis. “The European business could become loss-making against a difficult macro backdrop, a potential setback to restructuring achievements made. In a nutshell, Ford has one of the least attractive risk/reward profiles amongst Western OEMs on a 12-month view, which is why we downgrade to Sell.”

UBS also noted that much of its pessimism toward Ford stock pertains to its short-term outlook on all-electric vehicles for a number of reasons, including the fact that competition in that segment is rapidly increasing, while raw materials used in battery production are becoming more scarce and significantly more expensive to boot.

We’ll have more on Ford 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.

Subscribe to Ford Authority

For around-the-clock Ford news coverage

We'll send you one email per day with the latest Ford updates. It's totally free.

Comments

  1. Greggt

    No surprise here with all the issues Ford has failed to address.

    Reply
  2. Dan

    Their EV push has cost them dearly. A ton of folks are dumping their Ford stock due to Farley’s failed EV agenda. Don’t let your hard earned tax dollars bail them out either. Toyota said no to EVs and is thriving as a result.

    Reply
    1. Robert.Walter

      Nonsense. Toyota slept on pure EV and realized that Tesla, GM and Ford had really moved in this.

      You fail to note each time that this summer after Ford ramped up its investment plans that Toyota had a big presentation highlighting the acceleration of their EV development.

      I don’t know if you are desperately ignorant or trying to sell Toyotas or gasoline but at best it’s inaccurate and at worst untruthful to not pay tribute to fact that Toyota is a surprise laggard racing to catch up.

      Reply
  3. David Dickinson II

    If I owned Ford stock, I would have sold it as the roll-out for the Bronco and Maverick started to collapse. Combining that with horrendous quality issues; a strong US dollar that makes foreign sales especially difficult; Europe in an economic depression (not the recession as claimed) and Ford’ European division hurting from it; an EV blitzkrieg at the worst possible time; and the forthcoming hard recession in America. Sell, sell, sell.

    Reply
  4. Robert.Walter

    LoL you talk like the current situation was all predictable at the time Bronco launched.

    Ridiculous search for backolades.

    Also nice FUD “horrendous!” “depression!” “fake recession!” “Hard recession” scaremongering.

    What stocks are you shorting?

    Reply
  5. hot toddy

    the increased sales number in the 3rd quarter that they are very proud of just told us how bad the previous quarter was. the upcoming recession in the next 12-18 months will allow them to put more units on dealers’ lots since consumers won’t want to invest in a new vehicle. A sad, predictable story that could have been avoided.

    Reply

Leave a comment

Cancel