Ford Stock Is Trending In The Stock Market, Is Time To Buy [Or Sell] The Automaker?
If you are looking for electric vehicle stocks to buy, you would most probably be looking at Tesla (NASDAQ: TSLA) or Nio (NYSE: NIO). While these high-flying EV stocks may be the clear choice when it comes to top electric vehicle stocks to buy, it need not be the only game in town. More so when you think the valuation of these pure-play EV stocks is getting a little bit overstretched. In recent weeks, you may have heard of legendary automaker General Motors (NYSE: GM) reaching its all-time highs. This came after GM announced significant investments into electric vehicles and autonomous vehicle technology.
As the demand for EVs continues, the space has become increasingly crowded with many new players. This could potentially backfire if you have made the wrong bet. As a result, Ford (NYSE: F) has become quite an attractive option to bet in this red-hot industry. If you take a closer look at Ford stock, you might love what it has to offer. And to demonstrate its seriousness, Ford is introducing two EV models. The flagship model Mustang and F-150 pickup have gone electric with sleek designs. Certainly, Ford is not resting on its laurels here.
The company’s stock has been on an upward trend since the market sell-off last March. While it may lag behind GM stock’s recent performance, some are speculating that F stock’s recent rally could be just the start of a bigger rally. Apart from the Mustang Mach-E and F-150, its investment in electric truck company Rivian as well as other events coming up can help lift F stock higher.
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Favorable Analyst Coverage On F Stock
Ford stock rose sharply on Wednesday’s session. This came after Emmanuel Rosner, an analyst from Deutsche Bank added the company’s stock on its short-term buy list. He made the move in anticipation of the acceleration of government spending on infrastructure and vehicle electrification under the Biden administration. In addition to that, Rosner also believed that the company is likely to obtain restructuring savings from its efforts in South America where it recently exited Brazil.
“For 2021, we are forecasting Ebit/EPS of $7.5bn/$1.20, above consensus of $6.8bn/$1.00, and think management could guide Ebit/EPS well above $7bn/$1.00,” the analyst said, according to StreetInsider. “Ford is on the cusp of an attractive product launch cycle (new F-series, Bronco, Mach-E), which should boost volume/price.“- Emmanuel Rosner
Automotive Sector Continues To Defy Odds Amid COVID-19
The coronavirus pandemic was initially thought to be slowing demand for automotive sales. While that may be true during the onset of the pandemic, it’s no longer the case when the world slowly returns to normalcy. In the new normal that we are living in today, practicing social distancing has become a norm. As such, consumers are likely to be traveling in their own vehicle to prevent catching the novel coronavirus from the public commute.
Even Jim Cramer commented that the auto sector will be worth taking a closer look at under the new administration. “People don’t understand that we are in a hybrid society now because we have tasted the idea of not going to the office and we don’t want to go back. So, people who have jobs and commute may be a thing of the past, particularly with a president that is anti-fossil fuel. Remote work is Ford and GM. I prefer Ford and it has been a remarkable winner. Because Jim Farley is running Ford.“- Jim Cramer
Now, Ford is trying to stage a comeback. By riding on the EV wave, this all seems possible. This means that Ford will produce more cars like Mustang Mach-E to stay competitive in the EV market. While the new EV players may have to rely on third-party to manufacture and scale, Ford already has the expertise to do all these with ease. Not to mention that EVs are easier to manufacture. It seems that Ford could continue to gain more traction in the EV space. Therefore, it will be worth taking a closer look along with GM stock.
Improving Auto Sales & Brighter Outlook Are Reasons For Bullishness
From the company’s third-quarter results, it has reported $2.4 billion in net income. That was an improvement of $2 billion from the same quarter in the previous year. From the factory floor to Wall Street, investors and analysts seem to be very pleased with its new management and strong auto sales. Ford is also reportedly doing extremely well in China by posting the largest year-over-year sales increase since 2016. It saw third-quarter sales growing 25.4% in the Chinese market.
Investors hoping for more details can mark February 4 on their calendar. That is when CEO Jim Farley and new CFO John Lawler will discuss the company’s fourth-quarter and full-year 2020 earnings.
Some may consider Ford a latecomer to the EV party. And there is some grain of truth in that. As a result, some may consider Ford to be almost as speculative as other EV start-ups. But I think that might be a little bit harsh. After all, Ford has a track record of making and selling cars. You can’t say the same about some of the newer EV stocks out there. With its plans to transition to electric and self-driving cars, you know this old dog can learn new tricks. As a pioneer in the automotive industry, would you be betting on Ford to reinvent itself for the decade ahead?