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Ford Motor Company (F), with a market cap of $41.2 billion, is a leading player in the automotive industry. Based in Dearborn, Michigan, the company designs, manufactures, and services a diverse range of vehicles, including cars, trucks, SUVs, and luxury models, while also providing financial services through Ford Credit.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Ford Motor fits this criterion perfectly. Ford Motor Company is renowned for pioneering mass production techniques, such as the moving assembly line, which revolutionized manufacturing efficiency and set a global standard known as Fordism.
However, the American car maker has declined 30.5% from its 52-week high of $14.85, reached in July. Over the past three months, shares of F have fallen 16.6%, underperforming the broader Dow Jones Industrials Average's ($DOWI) 4.8% rise over the same period.
Longer term, Ford Motor has declined 15.3% on a YTD basis, lagging behind DOWI's 8.1% gain. Additionally, over the past 52 weeks, F shares have slipped 16.1%, compared to DOWI’s 17.8% return during the same period.
F has shown a bearish trend, consistently trading below its 50-day and 200-day moving averages since late July.
Ford Motor stock has been a weak performer this year due to a slowing automotive market, declining new and used car prices, and slower-than-expected EV transition, which has affected both sales and investor confidence. Furthermore, the stock crashed 18.4% on Jul. 25 due to a significant earnings miss, with profits per share at $0.47 falling short of analyst expectations despite strong revenue and vehicle sales. The key issue was a 40-basis-point contraction in net profit margins, largely driven by increased warranty reserves due to higher repair costs for broken vehicles, reflecting quality control problems.
To emphasize F’s underperformance, its rival, General Motors Company (GM), has outpaced F. General Motors has seen a 24.8% rise on a YTD basis and gained 36% over the past 52 weeks, outperforming F in both periods.
Despite Ford Motor's underperformance over the past year, analysts are moderately bullish about its prospects, with a consensus “Moderate Buy” rating from the 18 analysts covering the stock, and the mean price target of $13.23 suggests a premium of 28.2% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
