Ford Motor stock forecast for 2022 – Q1 sales break EV record

Ford Motor Company (NYSE: F) is providing a glimmer of hope as we open the door to 2021. Bulls, in particular analysts, are confident Ford stock will continue to gain in 2021. Furthermore, investors have rallied behind the company as they announced they will be investing $29 Billion in EV and autonomous vehicles. Furthermore, according to Morgan Stanley analysts Ford’s EV Mustang Mach-E has recently stolen market share from Tesla’s Y Model. This statement has also been recently backed up by Ford’s strong Q1 2021 sales performance which we will discuss below. This article will breakdown Ford Motor’s stock forecast for 2022.

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Ford Motors is changing in 2021

Firstly, over the past 12 months we have seen a shift of great magnitude towards the electric vehicle industry. Hence, this has poured into the markets reflecting in strong growth across a vast range of Electric Vehicle and Energy companies. Ford Motors is now changing its business to deliver Electric Vehicles to compete with giants such as Tesla.

“The transformation of Ford is happening and so is our leadership of the EV revolution and development of autonomous driving … We’re now allocating a combined $29 billion in capital and tremendous talent to these two areas, and bringing customers high-volume, connected electric SUVs, commercial vans and pickup trucks.”

said Ford President and CEO Jim Farley in Q4 earnings release

Analysts price targets for Ford stock

Analysts and Ford Motor price forecasts remain slightly bullish come 2021. Amongst 14 Wallstreet analysts, 6 have listed a Hold rating while 6 have determined a Buy rating. The average 12 month price target is at $10.93 a share. This suggests an downside of 12% from the current trading price. Here are some of the more recent price target forecasts from analysts at larger financial institutions:

Jeffries Financial 3/29/2021 – analysts boosted their 12 month price target from $14 to $16 a share whilst maintaining their buy rating.

Barclays 3/25/2021 – Analyst Brian Johnson at Barclays upgraded their rating on Ford Motor from Equal Weight to Overweight. Barclays also boosted their 12 month price target to $16 a share.

2/9/2021 Argus – Analyst Bill Selesky upgraded their rating on Ford stock from a Hold to a Buy, with a current price target at $14 a share.

2/05/2021 Benchmark – Analysts Michael Ward at Benchmark increased Benchmark’s 12 month price target for Ford stock from $12 to $14 a share, suggesting an upside potential of 11% from the current trading price.

When reviewing price targets the most recent targets provide more relevant insight into the current consensus amongst institutions in comparison to older price targets. The recent consensus amongst analysts confirms a bullish hint with two of the most recent targets at $16 a share (upside of 30%).

Financial outlook for Ford Motors

Revenue forecasts

Since the initial impacts of COVID-19, Ford has rebounded and produced positive EPS results for the Q3 and Q4 of 2020. The company expects to generate between $3.5 billion to $4.5billion in adjusted free cash flow in 2021. In addition, analysts expect the company to generate $143.67 Billion in revenue in 2021. They expect this to improve further in 2022, with an average revenue forecast of $153.16 Billion. The forecasts show improvement YOY for what was a rough year of business due to COVID disrupting the demand and supply of Ford vehicles.

However, Ford noted that the global semiconductor shortage is creating uncertainty across multiple industries. The company advised this will effect Ford’s 2021 operating results and will look to provide further updates regarding the shortage. The company expects Ford’s 2021 adjusted EBIT to lower between $1.0 Billion to $2.5 Billion due to the current shortage.

Ford is investing in strategic areas like Electric Vehicles, connected services and autonomous vehicles. The CFO affirmed they are confident this investment will provide fortification of the balance sheet and fuel growth in the future. In addition, the companies Q1 Sales release affirmed this confidence in EV sales with 25,980 EV vehicles sold in the quarter which is a 74% increase. Furthermore, the company was able to deliver 6,614 Mustang Mach-E vehicles in the first quarter of 2021.

Our customers are really embracing our new electrified vehicle lineup. The all-new fully electric Mustang Mach-E and the F-150 PowerBoost Hybrid lifted Ford’s overall electrified vehicle sales to a record start in the first quarter with sales up 74 percent over a year ago.

Andrew Frick, vice president, Ford Sales U.S. and Canada

Summary

Overall, Ford Motor company has performed well in the recent months, which is being reiterated by majority of analysts. The high end targets of $14 a share will definitely excite shareholders as we move into 2021. The company is confident in its ability to build its EV sector to compete with large competitors such as Tesla. However, the current semiconductor shortage will have an impact on the Q1 2021 earnings which is something for investors to monitor.

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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