Following a period of highs following the installation of Jim Farley as The Blue Oval’s CEO back in 2020, Ford stock has since been on a bit of a roller coaster ride, much of it fueled by the automaker’s massive investment in EVs and supply chain issues stemming from the pandemic. However, things were looking good recently after Citi upgraded Ford stock to a “buy” rating, which was aslo the case with the investment banking and capital markets firm Jefferies, while CNBC‘s Jim Cramer stated that he believed Ford stock was underrated just last month. However, following the release of the automaker’s Q2 earnings report last week, Jefferies has decide to downgrade Ford stock from “buy” to “hold,” according to Investing.com.
The problem, it seems, is Ford Model e’s disappointing results, which included a $1.08 billion dollar loss in Q2 as The Blue Oval lost a whopping $32k per unit sold. This was more than offset by the Ford Blue ICE and Ford Pro commercial sides of the business, which raked in substantial amounts of pretax profit – $2.3 and $2.4 billion, respectively, but that still wasn’t enough to persuade investors that Ford stock is an appealing buy at the moment.
“We appreciate efforts in disclosure and accountability and note no apparent change to mid-term strategy, with Gen 2 focused on software centric and concentrated line-up making sense to us, but effective in ’26 leaving a less differentiated investment case in the interim years,” Jefferies analysts wrote in a note. “Q2/H1 delivered better results and guidance but these are backward looking. We continue to run a slow-motion-soft-landing scenario with price normalization helping volume and cost inflation easing, aware of well-flagged risks from union negotiations.”
In addition, Jefferies also slashed its 12-month price target for Ford stock from $17 to $15, while also raising its adjusted 2023 EBIT forecast estimates by 10 percent to $11.9 – though it also decreased its 2024 estimates by 16 percent, to $10.2B.
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Comments
Ford electric ambitions are draining the company. In a time when it’s heavy hitters are faltering due to high prices, supply chain issues limiting production, etc… And they’re just losing money hand over fist on electrics that have hit a wall in sales.
Ford is gonna have a very hard time convincing investors it’s making the right choice to keep dumping money into that dumpster fire as profits slow.
Yep. How long can Ford (or anyone else) justify a $30k+ loss per vehicle. Analysts have finally realized the EV utopia has a much longer timeline for implementation. How many quarters can Model-E lose $1B before a serious course correction is made? From the various Ford “hybrid” announcements, it looks like that course correction just started.
Furd jumped the gun on their EV’s, they are prehistoric in design compared to other automakers. They tried to be 1st with EV pickup and it turned into a real turd, now they’re paying the price with a 30k loss on each vehicle, the so called Mustang Mach E is the same way, another 30k loss.
They built the best electric truck because it’s still a truck, that happens to be electric. The problem is the whole idea is flawed. Batteries don’t work well for towing, which is a big selling point for fullsize trucks. Combine that with a poor value prop and a high price and it’s no wonder they’re flopping.
But hey, they’ve still sold more EV trucks than Rivian or Tesla right?
Because Americans aren’t interested in EVs in any significant way. The grassroots boycott is working against EVs. #BudLight
At least Ford has its other divisions to fall back on….unlike Tesla…..who didnt make a profit for 17 years….and Wall Street cheers it every move….
Tesla has a real CEO, unlike Ford.
I think it’s pretty well going to be 2 more years of stupid season for any company building EVs except Tesla. The market seems to be convinced that nobody but Tesla can make a EV due mostly to their lack of understanding that it’s just a car with electric motor. We really are strange creatures. Of note the Japanese brands are behind as far as implementing EVs as such I think brand loyal customers are not being swayed .