Ford Motor's electric vehicle sales tumbled in January but hybrids surged, a sales release on Friday showed. Ford stock tested a key technical level with earnings due.
The sales release came a day after analysts at Morgan Stanley named Ford a new top pick among U.S. automakers. Slower industrywide adoption of electric vehicles (EVs) could actually be a positive for F stock if it compels the automaker to limit $5 billion-$6 billion in planned 2024 EV spending, which may never generate a positive return, the analysts said in part.
But while "pure" or battery electric vehicle (BEV) sales have slowed, hybrid EVs are hot.
Ford's U.S. new vehicle sales grew 4.3% year over year in January, to 152,617 units. Sales were boosted by a 42.7% jump for hybrid cars, including a near-doubling of sales for the Maverick truck, sold in both gas and hybrid versions.
By comparison, Ford's BEV sales slid 10.9% in January. Internal combustion engine (ICE) vehicles, making up the vast majority of Ford's total sales, rose 2.6%.
The automaker's hybrid electric sales also outpaced BEV and ICE growth in the fourth quarter of 2023, surging 55.5% vs. the year-ago quarter.
Ford reports Q4 earnings on Tuesday Feb. 6, after the market close.
Legacy automakers continue to pare back their big bets on battery electric cars, with hybrids seen as a fuel efficient but less compromised alternative to gas vehicles. Archrival General Motors said Tuesday it will bring back hybrid vehicles to North America, hedging its earlier pursuit of an all-electric strategy.
Ford Stock Tests Key Level
Shares of Ford Motor were unchanged in premarket trade on stock market today. Ford stock has been struggling to recover above its 200-day moving average after undercutting that key support level in late December. A move back above that line could mark an early entry for risk-tolerant investors.
The automaker has rallied into Q4 earnings, with shares up 6.5% this week so far.
GM stock jumped more than 10% last week after a bullish outlook and a less harsh than expected Q4 report. Tesla stock slid further early Monday on the heels of its biggest-ever EV recall.
Stellantis stock jumped 1.2% in premarket action, with the automaker's Q4 report due Feb. 15.
EV Losses Weigh On Ford Earnings
On Thursday, Morgan Stanley gave its "new top pick" Ford stock a $15 price target, representing roughly 25% upside from Friday's intraday price.
The analysts urged greater belt-tightening as EV momentum stalls. They believe Ford has room to spare both to preserve capital and to return excess cash to shareholders.
"Eliminating the losses from Model e (Ford's capital intensive EV business) would add roughly $1 per share to our FY 2024 earnings per share (EPS) forecast, driving roughly a 50% EPS upgrade," they said.
While F stock has rallied into Q4 earnings, it remains below its 52-week high, near 15, and well below the five-year high, near 26.
