Summary
- Ford is shifting its electric vehicle strategy to focus on hybrids, affordability, and longer ranges
- Ford is expected to report revenue of $41.7 billion and earnings of $0.51 per share for Q3 2024
- Ford’s U.S. sales increased slightly in Q3, with surges in hybrid and electric vehicle sales
- Ford’s stock performance has been volatile, with annual returns fluctuating significantly
- Ford is benefiting from a more balanced approach to electric vehicles and recent changes to U.S. monetary policy could provide a tailwind for the company
Article
Ford is expected to report its Q3 2024 results in the coming weeks, with analysts predicting revenue of around $41.7 billion, a 1% increase from the previous year. Earnings are projected to be approximately $0.51 per share, up 40% from last year. Despite a 7% decrease in its stock price year-to-date, Ford has outperformed fellow auto giant GM, which has seen a 35% increase. The company’s U.S. sales have grown slightly, with hybrid and electric vehicle sales showing positive momentum, while interest rates and consumer spending softness pose challenges.
In the second quarter of 2024, Ford reported adjusted profits of $0.47 per share, a 35% decline from the previous year and below estimates. Revenue grew by 6%, but earnings were impacted by rising warranty repair costs associated with vehicle quality issues from 2021 and earlier. Ford hopes to improve its performance with a higher mix of truck sales and growth in its premium Lincoln brand. Ford’s stock returns have been volatile in recent years, with promising gains in 2021 but significant losses in 2022, suggesting uncertainty in the market.
Ford is adapting its electric vehicle strategy by focusing on a balanced portfolio of gas, hybrid, and electric vehicles, aligning with consumer preferences. This approach aims to enhance profitability by optimizing traditional segments while gradually enhancing electric offerings. Recent changes in U.S. monetary policy, including a rate cut by the Federal Reserve, may stimulate demand for vehicles, benefiting companies like Ford. These developments could aid in improving Ford’s stock valuation, which analysts currently value at $14 per share, indicating a 28% upside potential.
While uncertainties remain in the automotive market, Ford has positive factors that could drive future performance. The company’s revised EV strategy and the Federal Reserve’s rate cuts could present opportunities for growth. Investors are keeping a close watch on the U.S. economy for signs of a potential recession, understanding how such a scenario could impact Ford and other stocks. Overall, with a more balanced approach to EVs and potential tailwinds from the financial sector, Ford is positioned to navigate challenges and capitalize on opportunities for future success in the market.
Read the full article here
