BofA reaffirms Ford stock Buy rating, maintains $14 target

On Tuesday, BofA Securities maintained a positive stance on Ford stock (NYSE:F), reiterating a Buy rating with a $14.00 price target. The firm’s analysis followed Ford’s first-quarter performance in 2025, which they described as solid. BofA Securities highlighted the reduced losses in Ford’s electric vehicle division, Model e, as a positive development. With a market capitalization of $40.4 billion and a notably low P/E ratio of 6.8, Ford currently trades at levels that InvestingPro analysis suggests are fairly valued. The company maintains a significant dividend yield of 7.4%, marking it as one of the more attractive dividend payers in the automotive sector.

The firm noted that Ford’s management emphasized the company’s strong position in the core truck market, despite acknowledging the challenges posed by high market volatility. The visibility for the company’s future was characterized as reduced due to this volatility. BofA Securities also addressed the potential impact of tariffs on Ford, suggesting that while it could be meaningful, it is likely to be manageable within the broader context of Ford’s operations. InvestingPro data reveals Ford’s substantial annual revenue of $185 billion, though its gross profit margin stands at a modest 8.4%. For deeper insights into Ford’s financial health and detailed analysis, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The analyst from BofA Securities pointed out that Ford’s significant U.S. manufacturing presence could offer a competitive advantage, potentially allowing the automaker to increase its market share. The firm’s commentary underlined the belief that Ford is well-situated to leverage its domestic production capabilities in the face of international challenges. With a beta of 1.55, Ford’s stock exhibits higher volatility than the broader market, suggesting potential opportunities for investors who can navigate market fluctuations effectively.

In the statement from BofA Securities, the analyst said, "Ford delivered a solid performance in 1Q:25, and the lower losses in Model e were encouraging." They continued to express confidence in Ford’s ability to navigate the current market conditions, adding, "Overall, while the estimated impact from tariffs is not insignificant, we think it is relatively manageable in the greater scheme of things."

The endorsement of Ford’s stock by BofA Securities comes as the automotive industry faces various challenges, including supply chain disruptions and shifting consumer preferences towards electric vehicles. Ford’s efforts to adapt to these changes and its emphasis on its core truck market appear to align with BofA Securities’ positive outlook on the company’s stock. InvestingPro identifies several additional key factors supporting Ford’s investment case, with 12 more exclusive ProTips available to subscribers, covering everything from earnings revisions to long-term performance metrics.

In other recent news, Ford Motor Company reported a significant earnings beat for the first quarter of 2025, with earnings per share (EPS) of $0.14, surpassing the forecasted loss of $0.02. The company achieved revenue of $41 billion, exceeding expectations of $38.15 billion, despite a 5% year-over-year decline. Bank of America (BofA) analysts downgraded Ford’s credit rating to Marketweight from Overweight, citing increased pressures from tariffs affecting Ford’s credit profile. BofA highlighted concerns about a potential CreditWatch Negative action by S&P Global Ratings, which could put additional pressure on Ford’s stock. Ford has suspended its full-year 2025 guidance due to uncertainties related to tariffs, which are estimated to impact earnings before interest and taxes (EBIT) by $2.5 billion. The company plans to reassess its guidance during the next earnings call, with potential offsets of $1 billion to mitigate net tariff impacts. Despite these challenges, Ford continues to make progress in cost improvements and strategic initiatives, contributing to its stronger-than-expected operational performance.

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