Even before U.S. President Donald Trump took office in January and imposed 25 percent tariffs on imported automobiles earlier this month, Ford stock was already being downgraded by various investment firms over concerns pertaining to high inventory levels and soaring warranty costs, among others. Now, with these new tariffs in place, Ford stands to be impacted in some ways, perhaps in a significant manner. Thus, it’s also not surprising to learn that another investment firm – Goldman Sachs – just opted to downgrade its outlook on Ford stock, too.
Just yesterday, Bernstein cut its price target for Ford stock by $2.40 to $7, citing concerns pertaining to increased costs stemming from tariffs – some of which are unknown at the moment and could vary greatly – coupled with worsening consumer sentiment. Now, according to Seeking Alpha, Goldman Sachs has opted to do the same, downgrading its outlook on Ford stock from Buy to Neutral. The investment firm acknowledged that its Buy rating – which was issued in September 2024 – was a bit too optimistic.
Goldman Sachs analysts pointed to the fact that Ford stock is down 10 percent thus far in 2025, and the consensus estimate for earnings per share has been revised down by 32 percent at the same time. Ford has weathered the storm better than most of its peers, they note, but increasing global competition, declining consumer sentiment, a slow ramp up in software and services, and tariff burdens are making investors bearish.
Ford has resigned to the fact that it will have to pay tariffs on imported vehicles and major components, but has been lobbying the Trump administration to reduce levies or remove them completely from low-cost parts made in countries with cheaper labor – something that it claims would add billions in costs. Though Trump opted to delay many tariffs by 90 days just yesterday, the automotive sector was not spared.
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With the Chinese car manufacturers making in roads in Europe with electric vehicles and also going upmarket with brands like Denza. It would seem there is an opportunity with Trump’s for Ford to export upmarket electric vehicles in the form of Lincoln EVs.
Ford desperately needs an upmarket brand in Europe and I think Ford should be developing an electric Lincoln which could be exported and sold as part of a Lincoln move into Europe. If the Chinese can do it, then so can Ford. Trump needs to be encouraged to make a good trade deal with the European Union and the UK and at the same time encourage GM and Ford to develop their upmarket brands with suitable electric vehicles for Europe and not gas guzzlers. This would partially offset some of the trade deficit in the longer term, but it needs long-term thinking and quality electric vehicles. If Ford are listening, then please consider it.
Quality control issues under Failure Farley have resulted in soaring warranty costs and now Ford stock has been downgraded by Goldman Sachs, the question is, why does Failure Farley still have a job? Is Ford Motor Company waiting for their stock price to drop below $6.00/share before they replace Failure Farley?