Ford stock has been on a bit of a roller coaster ride over the past couple of years, which is to be expected given the global pandemic and ensuing complications it caused for the industry as a whole. Throw in Ford’s massive investments in electrification amid various macroeconomic uncertainties, and there is certainly plenty of volatility here. However, analysts have largely either maintained or raised ratings on Ford stock recently, showing confidence in the company’s long-term plan. That isn’t the case with Swiss multinational investment bank and financial services company UBS, however, which just downgraded its outlook on Ford stock, according to Yahoo Finance.
UBS downgraded Ford stock from “buy” to “neutral,” noting that this move was made as it believes that the automaker’s shares are fairly valued at the moment with a limited upside, while also arguing that The Blue Oval may have more obstacles to overcome than its rivals in the coming months.
“What they mentioned is that while Ford is subject to the same industry headwinds as other automakers’ pricing, affordability, labor, investment and trying to increase their capital efficiency, they believe Ford may have more to reverse versus peers considering execution and quality challenges,” said Brad Smith of Yahoo Finance. “The demand there, the growth in EVs simply not living up to what many of the forecasters had expected that to look like,” added fellow analyst Seana Smith. “We’ve seen a number of these automakers, Ford included, adjust their plans as a result of this. And now UBS analyst there, Joe Spak, coming out saying that he’s downgrading the company because he thinks this transition is going to take a little bit more time to play out.”
Ford recently announced that it was pushing back a planned $12 billion dollar investment in electrification and even canceling plans to build a joint-venture battery plant in Turkey as demand for EVs tapered off near the end of 2023, even as sales set a new record for the year. Regardless, the long-term outlook for EVs remains positive, with most expecting demand to continue to grow for the foreseeable future – just perhaps not as quickly as originally thought.