It wasn’t too terribly long ago that Ford stock was a popular pick among Wall Street investors, and for good reason – the automaker looked to be in a prime position for a future that was previously expected to adopt electric vehicles at a more rapid pace. That hasn’t exactly happened as demand for EVs is waning behind expected levels of growth, which isn’t a good thing for a company that has invested a lot of money in electrification – even as the Ford Pro commercial business continues to post strong financial results. Throw in high warranty costs and soaring inventory levels, and it’s no surprise that another analyst has downgraded its outlook on Ford stock.
That analyst comes from Barclays, according to Investing.com, who just downgraded Ford stock from Overweight to Equalweight, while also dropping their price target for Blue Oval shares from $13 to $11. The chief reasoning behind this move stems from uncertainty in Ford’s earnings profile, which itself stems from normalizing prices and inventory levels that remain among the highest in the industry. Barclays acknowledged Ford’s efforts to cut costs to compensate, but it remains skeptical that the automaker will be able improve in that regard.
Barclays is just the latest investment firm to downgrade its outlook on Ford stock, joining Jefferies, which shifted its outlook from Hold to Underperform while also lowering its price target from $12 to $9 last month. Jefferies cited many of the same reasons for that decision – soaring inventory levels, a fair financial health score, weak gross profit margins, Ford’s struggles in Europe, and high warranty costs, which offset strong sales as of late.
As Ford Authority just reported, new Ford inventory levels were the eighth highest of any automotive brand in the U.S. in December 2024, closing out the month at a 113 days’ supply versus the industry average of 75 days. Further complicating matters are threats of potential tariffs from President Donald Trump on goods imported from Canada and Mexico, given the fact that Ford builds a trio of models in the latter country and sells them in the U.S.
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