Ford (F) is often touted as a legacy automaker that produces the majority of its vehicles in the U.S.
However, that won’t prove sufficient in protecting it against significantly higher tariffs under President Donald Trump, warns Daniel Roeska, a Bernstein analyst.
On Wednesday, Roeska downgraded Ford stock to “Sell” and lowered his price target on the car giant to $7 that indicates potential downside of another 20% from current levels.
Note that F shares are already down about 17% versus their year-to-date high in late January.
Why Made Bernstein Turn Its Back on Ford Stock?
Bernstein analyst Daniel Roeska expects Trump’s recently announced tariffs to result in a meaningful increase in vehicle prices. Often, such increases in vehicle prices result in significantly lower demand.
Against that challenging backdrop, he’s not entirely sure if Ford will be able to continue paying a dividend.
While the multinational manufactures about 80% of its vehicles in the United States, higher tariffs on auto parts could still lead to a material decline in Ford’s earnings and free cash flow this year, the analyst added.
In his research note, Roeska slashed his forecast for Ford’s earnings per share (EPS) from $1.46 to $0.86 only in 2025.
Bernstein Is Dovish on the Entire Auto Sector
Bernstein’s dovish view is not restricted to Ford only. Last week, the investment firm downgraded its peer General Motors (GM) as well, indicating there’s really nowhere to hide from tariffs in the auto sector.
All in all, the recently announced levies on vehicle imports could result in billions of dollars in losses for the Detroit automakers, Roeska warned in his research note today.
Investors should note that Ford’s management itself guided for a difficult year ahead in February.
At the time, the NYSE-listed firm lowered its adjusted EBIT outlook for 2025 to $8.5 billion (top end of the range) – well below analysts’ forecast of $8.3 billion and the $10.2 billion it recorded last year.
Street’s Mean Target on Ford Still Represents Upside
Tariffs have made other analysts turn their backs on Ford stock as well.
The consensus rating on Ford currently sits at “Hold” and the mean target has come down sharply to $9.73 in 2025. However, compared to current levels, that still represents potential upside of 12%.
