Ford Stock (NYSE:F)
Have you given any thought to making a purchase on the stock market? Are you looking for a chance that has the potential to yield good results? You’re in luck because I have some good news for you! As a result of the analysts’ discovery of an intriguing void in the market, the purchase of Ford stock is being suggested as a potential strategic move.
A Buy recommendation was issued for shares of Ford Motor Company. Wall Street has not yet caught up with what is possible despite the fact that business execution is getting better. That presents a possibility.
On Tuesday, Jefferies analyst Philippe Houchois recommended buying shares of Ford (NYSE:F) rather than holding onto them. His price target increased to $16 a share, up from $13 previously.
Houchois gained more confidence in the company after attending an investor event hosted by Ford on May 22 in Dearborn, Michigan. The event was held to discuss the company’s plans to “close a deficit of execution that has dogged shares for years.” If we execute our plan more effectively, we should see an increase in our profits in the long run.
One of the ways Ford plans to improve its execution is by better focusing on business. Model e, which is the company’s electric vehicle (EV) business, Ford Blue, which is the traditional gasoline-powered business, and Ford Pro, which is the company’s commercial business, were recently created as part of Ford’s recent reorganization into three new business units.
Ford believes that the newly implemented operating structure will be able to generate operating profit margins of 10% by the year 2026. Operating profit margins are projected to be approximately 5% in 2026, whereas Wall Street anticipates operating profit margins of approximately 6% in 2023. The fact that there will be no significant progress made is anticipated to be appealing to Houchois.
“With more focused products and market exposure as well as reduced complexity, we find roadmaps to improve returns across all three divisions credible,” the analyst wrote in his report.
Houchois makes the observation at Blue that Ford intends to cut costs annually by billions of dollars. He anticipates that Model E will come very close to breaking even by the year 2025. Ford anticipates a loss of approximately $3 billion in 2023 related to the Model E. In addition, Ford Pro is concentrating its efforts on selling software and services to fleet customers. This strategy is expected to result in higher profit margins and less cyclical profits overall.
Due to the Buy rating, Ford shares have been moving, and as of Tuesday midday trading, they were priced at $12.68 per share. The S&P 500 SPX 0.00% has gained approximately 0.1% since yesterday. About 0.4 percentage points have been subtracted from the Dow Jones Industrial Average DJIA -0.15%.
When Tuesday’s gains are factored in, the total value of Ford’s stock market capitalization is approximately $2.8 billion higher than that of General Motors (GM). Early in the month of April, Ford’s market cap surpassed that of GM. That does not happen often. Over the course of the past five years, the difference between Ford’s and GM’s market caps has been less than fourteen percent of the time.
This past week, Tesla assisted in pushing Ford further ahead of GM by assisting Ford in announcing on Thursday evening that its electric vehicle drivers would be able to use Tesla’s supercharging network in 2024. This announcement helped Ford move further ahead of GM. On Friday, the stock of Ford gained 6.2%. The price of Tesla stock increased by 4.7%, while GM shares went up by 2.7%.
Ford is well positioned for sustained expansion in the rapidly developing automotive market as a result of the company’s strategic emphasis on autonomous and electric vehicles. Investors have the opportunity to gain exposure to this potential growth, which may be undervalued in the market, by purchasing Ford stock.
A little less than forty percent of analysts covering the company have a Buy rating on Ford shares, but the overall sentiment on Wall Street remains lukewarm. About 53% of the stocks included in the S&P 500 have Buy ratings assigned to them on average.
A little more than forty percent of market watchers recommended buying Ford stock at the beginning of 2023. A certain amount of fervor for shares has been dampened as a result of rising interest rates and falling vehicle affordability.
The price target forecasted by analysts on average is approximately $13.70.
Over the course of the previous year, Ford stock has experienced a decline of approximately 12% leading up to trading on Tuesday. Over the same time period, the S&P 500 has gained approximately 2%.
Should I Put My Money Into Ford Stock at This Time?
According to the recommendation of the market analyst, the current gap presents a profitable opportunity for investors to purchase Ford stock. Before making any decisions regarding investments, however, investors should first conduct their own research and give some thought to their particular financial objectives.
To summarize, the advice given to investors to purchase Ford stock reveals an intriguing opportunity for those individuals. The fact that Ford’s true value is higher than its current stock price indicates that there is an opportunity for growth for investors who are willing to capitalize on the gap. The long and illustrious history of Ford, its unwavering dedication to technological advancement, and its many successful business ventures put the company in an excellent position for continued prosperity. Before making any decisions regarding their investments, however, investors need to conduct exhaustive research and give careful consideration to the risks that are involved.
Featured Image: Unsplash @ FourFour