DBS analyst Elizabelle Pang has maintained their neutral stance on F stock, giving a Hold rating yesterday.
Elizabelle Pang has given her Hold rating due to a combination of factors that include the strong performance of Ford Motor’s Pro segment and the company’s resilient business model. Ford’s “Freedom of Choice” strategy, which provides a mix of gas, hybrid, and electric vehicles, has allowed them to cater to a wide customer base and achieve record hybrid sales in the first quarter of 2024. The company’s significant exposure to corporate and government clients contributes to the stability and resilience of their business model, especially as the B2B model has shown stickier demand in contrast to weakening B2C consumer demand. Ford’s Pro segment, in particular, has been a strong performer, acting as a cash cow for the company.
Despite these positive aspects, challenges in the EV market and the associated losses have led to a cautious outlook, which is reflected in the Hold rating. While Ford’s first-quarter earnings in 2024 surpassed expectations with strong earnings and impressive margins, the electric vehicle segment continues to be a concern. The company’s Model E sales have seen a significant decline, and the EV division continues to incur losses. Although Ford’s management is optimistic and has maintained their 2024 guidance with expectations at the higher end, the ongoing issues in the EV space and the potential impact on investor sentiment justify the Hold recommendation. Elizabelle Pang acknowledges Ford’s strong points but also notes that the EV challenges remain an overhang on the company’s valuations.
F’s price has also changed moderately for the past six months – from $11.540 to $13.040, which is a 13.00% increase.
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Ford Motor (F) Company Description:
Ford Motor Company is a global automobile company and is the third largest car manufacturer in the United States. The firm is engaged in designing, manufacturing, and selling cars, trucks, and automobile parts. The company makes vehicles under two brand names – Ford and Lincoln. Its Ford family includes Fusion, Ecosport, Bronco, Explorer,Mustang Mach-E, F-150, and Ranger. Under the Lincoln brand, the company has popular models including Navigator, Aviator, and Nautilus.
