mobile-menu-icon
Ford Authority

Morgan Stanley Maintains Ford Stock Rating After China Pivot

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. Most recently, the investment firm Jefferies downgraded Ford stock from “buy” to “hold” following the automaker’s Q2 financial report, which revealed that it lost $1.08 billion in its Model e EV division, in spite of massive gains from Ford Blue and Ford Pro that offset that dip. However, as the automaker continues to reinvent its business in China, Morgan Stanley has decided to stand pat with its own evaluation of Ford stock, according to Investing.com.

Ford Explorer Timberline China 2023 Shanghai Auto Show - Exterior 001 - Front

Morgan Stanley maintained its Overweight rating on Ford stock with a 12-month price target of $16 following news that its 50:50 joint venture – Changan Ford – is in the process of setting up a new-energy passenger car joint venture with Chongqing Changan Automobile, which is owned by the state. Pending approval, Changan Ford would own a 60 percent stake in the new entity, with Chongqing Changan Automobile assuming the remaining 40 percent. However, since Changan Ford is a 50-50 joint venture between Ford and Changan Automobile, this means that Chongqing would actually own more than half of the newly created joint venture.

“The announcement corroborates Ford management messaging around leaning into the strength of Chinese auto players in China,” Morgan Stanley analysts wrote in a note. “We look forward to exploring areas where Ford can execute a relevant electric vehicle program while mitigating the significant cash drain on the enterprise.”

Ford Ranger China 2023 Shanghai Auto Show - Exterior 001 - Front Three Quarters

After previously designing and developing models specifically for that market, Ford China has since named a new president and CEO while simultaneously rebooting its strategy in a hotly contested market. Aside from trimming jobs and improving profitability, The Blue Oval is preparing to launch the Ford Bronco SUV and Ford Ranger pickup in the Chinese market, and just let Changan Ford assume sales and marketing responsibilities of the slow-selling Ford Mustang Mach-E, too.

We’ll have more on Ford stock soon, so be sure and 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.

Comment

  1. ronarb

    Might be a good idea for Ford to sell out everything in China to their partner, Changan Ford, and move on to better markets and opportunities across the globe – Mexico and Canada come to mind. The CCP is going to take over GM and Tesla at some point in time, so, might as well get something of F’s investments now before China invades Taiwan and nationalizes every US based business on the mainland of China.

    Reply

Leave a comment

Cancel