Why This Ford Analyst Is Downgrading Blue Oval Stock – Ford Motor Credit Company (F)

Ford Motor Company (NYSE:F) Shares have been in a tailspin, and the company’s shares have recently hit the $100 billion market capitalization mark.

Ford Analyst: Joseph Spaak, an analyst with RBC Capital Markets, lowered Ford’s rating from Outperform to Market Perform and increased the target price from $21 to $26.

Ford’s thesis: In a downgrade note released Friday, Spak said Ford’s transformation is continuing and the automaker could move effectively into the EV/AV/software world.

Ford brought the Mach-E to market quickly, saw strong demand and Dearborn has now tripled product capacity, the analyst said. He said the company is likely to bring its F-150 Lightning to market ahead of competitions, and that alone is a solid achievement.

Spak said the heavy reliance on the existing F-150 platform versus competitors who have taken the group’s approach, is a fair reaction. The analyst said it now appears that the company may not have a technical flaw and has entered the market faster.

He said Ford is generally targeting 600,000 BEV capacity in 2023.

“We are still not sure it will be able to produce to that level in 2023 if slopes are present, but it is much more than what was expected a few years ago,” Plumber said.

Related link: Ford can’t compete with Tesla despite doubling production of F-150 Lightning: Analyst

The company has also made significant investments in BEV and battery capacity as well as improving fundamentals from restructuring, positive earnings reviews and “unlocking” value from Ford by investing in Rivian Automotive, Inc. (NASDAQ:RIVN) and possibly from its stake in Argo, the analyst said.

Ford has reclassified and there may be some other possibilities for the company to reevaluate, as it continues to prove its transition, he said.

A plumber said that might take a while.

“To sum up, we believe that Ford’s stock price may hold for a while, so investors may choose to allocate capital to other auto names in the meantime.”

With the upside in the near term looking more difficult, RBC said it is moving to the sidelines.

Price Action F: On recent inspection, Ford shares were down 1.12% at $24.74.

Image courtesy of Ford.

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