The Ford Analyst: RBC Capital Markets analyst Joseph Spak downgraded Ford from Outperform to Market Carry out and elevated the worth goal from $21 to $26.
The Ford Thesis: Ford’s turnaround is nicely underway and the automaker can successfully transition towards a EV/AV/software program world, Spak mentioned in a Friday downgrade word.
Ford acquired the Mach-E to market shortly, it has seen robust demand and Dearborn is now tripling capability for the product, the analyst mentioned. The corporate is prone to get its F-150 Lightning to market forward of competitions, which alone is a stable feat, he mentioned.
The heavy reliance on the present F-150 platform versus opponents that took a group-up strategy, nevertheless, is a good pushback, Spak mentioned. It now seems that the corporate could not have a technical drawback and acquired to market faster, the analyst mentioned.
Total, Ford is now focusing on 600,000 BEV capability in 2023, he mentioned.
“We nonetheless aren’t certain they will produce to that degree in 2023 given ramps, nevertheless it’s considerably greater than anticipated just a few years in the past,” Spak mentioned.
The corporate has additionally made main investments in BEV and battery capability on high of bettering fundamentals from restructuring, optimistic earnings revisions and “unlocking” worth from below company Ford by the funding in Rivian Automotive, Inc. (NASDAQ:RIVN) and probably from its stake in Argo, the analyst mentioned.
Ford has re-rated and there might be some additional potential for the corporate to re-rate, because it continues to show its transition, he mentioned.
That would take time, Spak mentioned.
“Backside-line, is we consider Ford inventory worth could consolidate for some time, so traders could select to allocate capital to different auto names within the interim.”
With the near-term upside trying a bit tougher, RBC mentioned it’s transferring to the sidelines.
F Value Motion: Finally test, Ford shares have been down 1.12% at $24.74.
Photograph courtesy of Ford.