Update at 1:00 pm EST
Ford Motor (F) shares slipped lower Thursday after analysts at Jefferies lowered their rating on the carmaker ahead of the group's fourth quarter earnings early next month.
Jefferies analyst Philippe Houchois cut his rating on Ford to 'hold", from 'buy', noting that it's too early to re-rate the carmaker based on its planned drive into electric vehicle production, even as Ford looks to double the pace of its F-150 Lightning output to 150,000 units this year, and has said it's booked 200,000 reservations for the newly-unveiled electric pickup.
Houchois also bumped his price target by $5, to $20 per share, in response to higher-than-expected cash flows, and improved balance sheet and the carmaker's stake in EV startup Rivian (RIVN).
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Ford, in fact, said Wednesday that its 12% stake in the Irvine, California-based EV group would add $8.2 billion to its fourth quarter bottom line, but noted that "mark-to-market revaluations to account for changes in Rivian’s stock price could result in related gains or losses each quarter reported as special items."
Ford and its shares are in good shape and in good hands. The group has replaced, revived or re-invented all key product franchises, leapfrogging EV early movers in the US and in Europe," Houchois wrote. "We think it is premature to re-rate legacy OEMs for their EV progress since earnings remain mostly driven by cyclical shortages, returns remain within historical norms and the EV transition is largely a zero-sum-game initially."
Ford shares were marked 0.65% lower in early afternoon trading Thursday to change hands at $22.30 each, a move that would extend its one-week decline to around 10%.
Ford will publish its fourth quarter earnings on February 3, with analysts looking for an adjusted bottom line of 43 cents per share on revenues of $35.76 billion.
Ford said adjusted earnings for the full year would come in between $10.5 billion and $11.5 billion, up from its prior estimate of $9 billion to $10 billion, when it reported third quarter profits in late October.
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