Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Bernstein has reiterated its Underperform rating on Ford (NYSE:F), currently trading at $11.14 with a market cap of $44.3 billion, maintaining an unchanged price target of $8.30. According to InvestingPro data, 7 analysts have recently revised their earnings expectations downward, supporting Bernstein’s cautious stance on tariff costs and special items impacting the automaker’s bottom line.
The research firm noted that Ford’s second-quarter revenue beat was overshadowed by one-off charges and a downgrade to fiscal year 2025 EBIT guidance. The company’s weak gross profit margin of 7.22% and high EBITDA valuation multiple highlight ongoing operational challenges. Bernstein expects investors to focus on deteriorating earnings in the near term as the company faces pressures from tariffs and affordability-driven demand softness.
Bernstein acknowledged Ford’s unveiling of its Universal EV Platform as a signal of clearer long-term direction, which will underpin entry-level vehicles. The company’s strategy also includes less focus on emissions in the U.S., allowing increased sales share of large combustion engine trucks and SUVs.
Ford’s overseas activities will increasingly involve in-region partnerships, according to Bernstein’s analysis of management comments during the earnings call and the recent platform presentation.
While Bernstein views the strategic shift as positive for Ford, the firm believes the automaker must first navigate through challenges related to tariffs and warranty issues before a more constructive outlook can be considered. Despite these challenges, Ford maintains a significant 6.73% dividend yield and strong free cash flow yield. For deeper insights into Ford’s valuation and financial health metrics, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Ford Motor Company announced significant financial commitments to its electric vehicle initiatives. The automaker plans to invest approximately $5 billion across its Louisville Assembly Plant and BlueOval Battery Park Michigan, aiming to create or secure nearly 4,000 jobs. This investment includes nearly $2 billion to transform the Louisville facility for producing a midsize electric pickup truck, expected to be available to consumers by 2027. Additionally, Ford unveiled its Universal Vehicle Platform, with a $2 billion investment in its Kentucky facility to enhance electric vehicle manufacturing.
Ford is also addressing safety concerns, recalling over 103,000 vehicles due to axle hub spline issues that could lead to rollaway incidents or loss of drive power. Moreover, the National Highway Traffic Safety Administration has launched a probe into potential B-pillar trim issues affecting approximately 35,950 Ford Flex (NASDAQ:FLEX) vehicles. On the financial analysis front, BofA Securities reiterated its Buy rating for Ford, setting a price target of $14. Meanwhile, Jefferies raised its price target from $8 to $9, maintaining an Underperform rating on the stock.
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