The Ford Motor Company (NYSE: F) specializes in the development, delivery, and servicing of a wide range of commercial cars, vans, sport utility vehicles, Lincoln luxury vehicles, and Ford trucks globally.
Analysts give Ford Motor Stock (F) a consensus buy rating. The rating is despite the company’s stock dropping by -1.71% YTD. A major reason for the drop in performance is the ongoing unionized strikes affecting all the “Big Three” Detroit car companies. As a result, operations have stopped at select factories.
The strikes may conclude soon, as the United Auto Workers (UAW) union announced on October 23, 2023, that it had reached a tentative agreement with General Dynamics (GD.N).
UAW and General Dynamics have agreed on a new labor contract covering 1,100 workers at some US defense contractor facilities. It provides a 14% wage hike, protection from inflation, reduced time to get to top pay, and beat back proposed healthcare concessions.
Ford Motor Financials
For some, the current situation at Ford is the perfect opportunity to sell. However, it might be the right time to buy for others, as the share price has dropped nearly 25.55% since its 52-week high on July 12. Before making any decision, looking at the financials is important.
In its most recent earnings report for fiscal Q2 2023, Ford reported revenues of $42.43 billion, against an expected $41.32 billion, a surprise of 2.68%. The company also reported a better-than-expected EPS of $0.72 against the analysts’ expectation of $0.54, a surprise of 33.71%.
Its revenues are up 12% year-over-year, with a net income of $1.9 billion and an adjusted EBIT of $3.8 billion. The report also raised its FY 2023 guidance for adjusted EBIT to $11-$12 billion and free cash flow to $6.5-7 billion.
Ford revealed that it is focusing heavily on the transition to electric vehicles. Its electric vehicle segment, dubbed the Ford Model e, is doing quite well. The segment’s revenue grew 39% in the last quarter, with the company expecting to reach a 600K run rate in 2024.
However, the segment has been running at an operating loss of $1.8 billion in the past six months. Ford hopes to utilize its marketing and manufacturing expertise to boost its EV push.
Ford Stock Performance
F stock is currently 48.82% below its all-time high of $22.43, which it achieved on January 14, 2022. The stock currently has a PE ratio (TTM) of 11.15, with a much lower price than the average S&P 500 Index company does. For some investors, this is simply too good of an opportunity.
F Stock Forecast
Analysts give a median price forecast for the Ford Motor Company of $16.65, with a high price estimate of $28 and a low price estimate of $10.
Is Ford Motor Stock a Good Buy?
While F stock has great financial numbers, it is worth noting that the car manufacturing industry is highly competitive. For instance, Ford has to contend with competition from Tesla in the EV sector. Internationally, it has to compete with Hyundai, Toyota, and other leading brands.
Consequently, it is difficult to gain market dominance. The car industry is also highly cyclic, with macroeconomic factors playing a huge role in car sales. When deciding whether to purchase F stock, carefully weigh all the bear and bull cases.
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