Ford Motor Company (NYSE: F) has outperformed over the past 12 months gaining 108%. Bulls in particular, are confident Ford stock will continue to prosper as Wallstreet continues to back the Electric Vehicle movement. Furthermore, investors have rallied behind the companies announcement on the Ford + initiative and a $30 Billion investment in Electric Vehicles by 2025. The two electric vehicle models expected to drive strong demand are the Ford Mustang Mach-E and F-150 Lightning truck. 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.
In addition to manufacturing EV’s, the company is also investing in battery technology to equip the business to design and manufacture its own batteries. Ford is investing in connectivity and innovation by launching Ford Pro, a seperate business within Ford that will improve uptime, cost and performance of EV fleets.
“I’m excited about what Ford+ means for our customers, who will get new and better experiences by pairing our iconic, world-class vehicles with connected technology that constantly gets better over time…This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T, and we’re grabbing it with both hands.” said Ford President and CEO Jim Farley in Q4 earnings release
Analysts price targets for Ford stock
The general sentiment across the board of Wallstreet analysts on Ford stock is currently Bullish. The average 12 month price target is $13.92 a share according to Market data. This suggests a slight downside of 1.37% from the current trading price. However for targets released in the past quarter alone, the average target is $15.16 which suggests an upside of 2.5%. This suggests a recent shift in “smart money” sentiment which is a positive sign for investors. Here are some of the more recent price target forecasts from analysts at larger financial institutions:
UBS Group 6/29/2021 – Analyst Patrick Hummel boosted the firms 12 month price target to $16 a share while maintaining a Neutral rating.
Barclays 6/22/2021 – Analyst Brian Johnson increased the firms 12 month price target to $17 a share with an outperform rating.
JP Morgan 6/4/2021 – Analyst Ryan Brinkman boosted the companies 12 month price target to $18 a share with an Overweight rating.
Bank of America 6/2/2021 – Analyst John Murphy reiterated the companies 12 month price target at $14.50 a share whilst maintaining a Buy rating on the stock.
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 a 2.5% upside from the current trading price.
Financial outlook for Ford motors
Ford expected to outperform in Q2
Ford Motors has carried strong sales momentum into 2021 with Q1 EV sales breaking records. The company generated $36.2 Billion in the first quarter, with the Mustang Mach-E driving an uptrend in North American sales. The strong EV sales growth is expected to carry into the second quarter with Ford noting that EBIT will exceed expectations for the quarter. The company noted reservations for the battery-electric F-150 Lightning pickup had grown to 100,000 alongside 20,000 reservations for the all-electric E-Transit commercial van. The second quarter earnings are expected to be released on July 28.
Looking ahead, analysts forecast the company to generate $129.72 Billion in revenue in the 2021 annual year. The 2021 revenue forecast from analysts shows a 11% improvement YOY. Revenue is expected to further improve in 2022, with an average revenue forecast of $153.65 Billion.
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. Ford expects adjusted EBIT for 2021 to lower by $2.5 Billion due to the current semiconductor shortage. In addition, Ford also expects to lose about 1.1 million units of production in 2021 due to the semiconductor shortage.
EV is the future of Ford Motor Company
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
The bottom line – Ford stock forecast
Overall, Ford Motor company has performed well in the recent months, which is being reiterated by majority of analysts. The high end targets of $18 a share will definitely excite shareholders as we move into 2021. The company is confident in its ability to build its new business Ford+ to compete with large scale EV competitors such as Tesla. However, the current semiconductor shortage will have an impact on the 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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