Ford Stock (NYSE:F)
Ford (NYSE:F) stock rose little on Wednesday, with investors’ excitement at a huge Ford Blue-driven profit beat somewhat muted by a still-cautious full-year projection.
The company’s adjusted earnings per share of $0.63 for the first quarter was $0.19 more than analysts had predicted. As a result of the Ford Blue, overall quarterly revenue increased by 19% year-over-year to $41.5B. A quarterly EBIT of $3.4B, better than projected, also contributed to the upbeat mood.
While the earnings beat was impressive, Wall Street was surprised by the lack of an increase in guidance. The full-year guidance “includes headwinds that reflect global economic uncertainty, higher industry-wide customer incentives as vehicle supply and demand rebalance, lower past service pension income, exchange, and investments in growth such as customer service and connected services,” CEO Jim Farley told analysts on Tuesday night.
This is why Adam Jonas, an analyst at Morgan Stanley, believes the absence of increased guidance contributed to the widespread unfavorable reception the print first received.
On the bright side, the company has continued to have the support of optimistic analysts at both Bank of America and Benchmark. More optimistic analysts have criticized the provided outlook, saying it is too cautious.
Benchmark analyst Michael Ward told clients, “Ford’s guidance for 2023 is unchanged despite the beat, but we have increased our 2023 assumptions to the upper end of the range, or income at the adjusted EBIT level of $11B.” Our new projection for 2023 is $1.90, up from $1.65, and our new projection for 2024 is $1.85, up from $1.80. Our greater expectations have led us to raise our price objective from $19 to $20 per share. The Ford stock has earned a Buy from us.
John Murphy, an analyst at Bank of America, also increased his price target, this time to $23 from $22.
Consistent with general comments made during GM’s results, “[Guidance] implies pressure in 2H23, specifically around macro uncertainty and pricing power easing (mostly at Blue). On the call, management “also highlighted that commodity tailwinds will be lower than expected (now at $2B versus prior $2.5B) and tilted to the 2H,” as Spillane put it. “While we share management’s caution, it seems the outlook has some bright spots,”
On the other hand, Evercore and Citi were less enthusiastic in their assessments of the results and the cautionary note about macro trends issued by management on the earnings call. Analysts at the former company expressed worry that, although restating full-year profit projections, tQ1 might mark a peak. Both companies were encouraged by the automaker’s Q1 performance. Still, they would need to see further improvement in the following quarters before they would change their Neutral ratings.
On Wednesday, Ford stock increased by around 1%.
Featured Image: Unsplash @ FourFour
Author Shariq Khan 
