Ford stock has faced its fair share of adversity in recent years, largely due to softer-than-expected demand for all-electric vehicles, anticipated financial headwinds, competitive worries, inefficiencies, and pricing pressures. As such, a number of investment firms have downgraded their outlook on Ford stock in recent months, but now, the automaker is facing some new potential problems – including looming 25 percent tariffs on imports from Canada and Mexico, most notably, a development that also has investors concerned, it seems.
According to Investing.com, Piper Sandler analyst Alexander Potter has revised that firm’s price target for Ford stock – down from $13 previously to $9 – though it left its neutral rating intact, regardless. Potter cited a few motivating factors behind this decision, most notably, concerns revolving around the company’s financial performance and market challenges. Potter did point out that Ford has several strengths going for it – including its robust truck and Ford Pro commercial business – which are reliable sources of income.
However, Potter also noted that the profits Ford is making from those businesses are being offset by expenses from soaring warranty costs and slow EV sales across the globe. The Blue Oval has laid out a strategy to tackle these challenges, but it could take some time to implement and produce results, according to the analyst. Until that happens, Ford is expected to face additional difficulties centered around tariffs and potential regulatory changes, too.
This speculation comes as Ford enjoyed a successful Q4 2024, financially speaking. The Blue Oval raked in $1.8 billion in net income on $48.2 billion in revenue last quarter, which is a $2.3 billion dollar or 2.3 percent year-over-year increase in net income, and a $2.2 billion or 4.8 percent increase in revenue. However, much hinges on the aforementioned tariffs that are currently slated to take effect on April 2nd, and it doesn’t seem as if Ford and other automakers will be getting another 30-day reprieve in that regard.
Comments
Corporations have to loving the economic chaos Trump is inducting. If they didn’t know better, they might think he was trying to single-handedly destroy it! Can you say 6 bankruptcies?
So Piper’s ‘analyst’ thinks Ford’s “robust truck and Ford Pro commercial business” is only worth a market cap of $36B, considering those ‘robust business’ pull in around $10B in profit every year? And we’re to take this guy seriously?
Europe is imploding, China no longer a sweet spot, Mustang sales are dropping fast (…so much for keeping the “heritage alive” for the enthusiasts) and their company-wide quality keeps achieving new lows.
Where’s the upside??
Both Europe and China’s demographics themselves are imploding (they aren’t having kids fast enough to replace themselves). This automatically and directly affects their economies negatively. Yet these out of touch Boomer execs hired by Blackrock to push agendas think they should keep betting their company’s futures on these regions.
The upside was clearly stated. It is, and always will be, the truck business. It’s like criticizing Apple for Apple watch sales. Apple is all about iPhone sales, everything else is icing on the cake or analyst distractions. Don’t take the bait.
So, you must be impressed with a company that puts all of its eggs into one basket.
So quality control issues have resulting in soaring warranty costs at Ford, which means it’s time to fire Failure Farley unless the Ford Family wants the out-of-control warranty costs to keep increasing.
Ford could save lots of money by discontinuing the Lincoln brand, since the Lincoln brand is made of 4 boxy, overpriced Milk Trucks that has resulted in declining sales. Also, Ford customers have twice rejected a Lincoln pickup.
Lincoln is the “poster vehicle” for badge engineering.
A automotive brand couldn’t be more derivative in its styling and irrelevant.