Following a disappointing financial performance in the second quarter of the year, Ford stock has taken quite the beating as of late, even suffering its largest day-over-day percentage decline since 2008 last week. This drop stems from an adjusted profit of 47 cents per share, which was far below analyst expectations of 68 cents, while warranty costs were also much higher than expected – $800 million more than Q1 2024. Even though the automaker expects to hit its targets by the conclusion of 2024, analysts aren’t quite as optimistic.
In fact, according to Reuters, Morgan Stanley has ditched Ford as its “top pick” as the most valuable automaker in the U.S. automotive industry, and replaced The Blue Oval with Tesla in that regard. The reasoning behind this swap pertains not only to Ford’s poor Q2 financials, but also, some more optimism when it comes to Tesla’s approach – which spreads beyond simply building and selling vehicles.
Rather, Morgan Stanley analysts believe that Tesla’s budding energy business could wind up being worth more than its automotive business in the future, and it also believes that Tesla is well positioned to take on a more dominant position in the market for zero-emission vehicle credit revenue as legacy automakers like Ford continue to scale back their EV expansion plans. “We estimate Tesla may account for as much as half the credit sales in the market, supporting a 100 percent margin business for Tesla that may not be anticipated by the investment community at this time,” Morgan Stanley analysts said.
Interestingly, while Tesla stock jumped 6.3 percent following this move, the company itself didn’t have a great Q2 financial performance, either. Rather, the company missed its Wall Street earnings targets, and also posted its lowest profit margin in over five years.
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Comments
Looks like Ford is in da crappa!
Until the Chinese threat plays out, I wouldn’t invest a penny in ANY automaker in the US right now. Tesla is no better a pick than Ford, except for the non-automotive parts.