Ford: Buy, Sell, or Hold?

NYSE: F | Ford Motor Company  News, Ratings, and Charts

F – A key partnership, new product launches, and rapid entry into the electric vehicle (EV) market have helped Ford Motor Company (F) witness decent growth, while driving up its stock price significantly over the past year. However, there is a question as to whether the stock could retreat, given a recent lawsuit loss and the company’s mixed financial performance? Read ahead to learn more.

Ford Motor Company (F) is a manufacturer, designer and marketer of trucks, cars, sport utility vehicles, electric vehicles, and luxury vehicles. Its stock has gained 84.1% over the past six months due to its strategic investments in the electric vehicle (EV) space and a recent collaboration with Google (GOOGL) to offer unique services and capabilities to Ford and Lincoln customers.

However, given investor anxiety surrounding recent product liability lawsuits filed against Ford, and its mixed financial performance, we expect the stock to retreat in the near term.

While the company’s advancement in the global automotive business and its launch of its electric Mustang Mach-E and new F-150 this year have helped its  stock gain 134.1% over the past year, we think its future looks uncertain based on several factors.

Click here to checkout our Electric Vehicle Industry Report for 2021

Here’s what could influence F’s performance in the near term:

Partnership with Google Might Drive Growth

In February, F and GOOGL entered  a strategic six-year partnership to accelerate F’s transformation by establishing a new collaborative group–Team Upshift–and reinventing the connected vehicle experience for Ford and Lincoln customers. The partnership  should not only help F offer a superior experience to its customers but also accelerate its digital transformation. With the company is slowly moving into electric vehicles and the collaboration is expected to strengthen F’s presence in the industry.

Product Defect Lawsuit Creates Pressure

Earlier this month, the U.S. Supreme Court unanimously ruled that F could not limit the ability of injured individuals to sue manufacturers for defective products by restricting where those lawsuits can be filed. The lawsuits were filed because of two car accidents involving vehicles made by the company. If the lawsuit gets significant attention, it could make investors nervous.

Mixed Financials

F’s North America ebit was up 53% to $1.1 billion in the fourth quarter ended December 31. However, the company generated a net loss of $2.79 billion and a loss per share of $0.70 over this period. Its net cash provided by operating activities declined 59.1% sequentially to $4.54 billion.

F’s total assets have grown at a CAGR of 1.1% over the past three years. However, the CAGRs of its revenue and ebitda  have declined 6.8% and 31.8%, respectively, over this period.

Analysts Expect a Pullback

Currently trading at $12.15, analysts expect F to decline 26.1% to $8.98 in the near term. Of the 17 Wall Street Analysts that rated the stock, only three rated it Strong Buy.

Mixed Profitability

F’s trailing-12-month gross profit margin of 4.8% is 85.5% lower than the industry average 33.3%. Also, the company’s negative ROE and ROA contrast with positive industry averages. However, F’s trailing-12-month cash from operations of $24.27 billion is higher than the industry average of $192.13 million.

POWR Ratings Don’t Indicate Uncertain Prospects

F has a C overall rating, which equates to Neutral in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. Among these categories, F has a grade of B for Momentum, which is consistent with its  increase in price over the past year.

It has a C grade for Growth, consistent with its mixed financial performance.

In addition, F has a C grade for Quality. This is justified given the company’s mixed profitability ratios.

F is currently ranked #29 of 51 stocks in the B-rated Auto & Vehicle Manufacturers industry. In addition to the grades we’ve  highlighted, one  can check out F’s POWR Ratings for Value, Stability, and Sentiment here.

If you’re looking for better stocks in the Auto & Vehicle Manufacturers industry with an Overall POWR Rating of A or B, you can access them here.

Bottom Line

F’s strategic partnership with Google and its rapid advancement in the electric vehicle space could help the stock keep pace with its competitors in the auto industry and benefit significantly. However, the company’s mixed financials and profitability amid lawsuit pressures could make it difficult for the stock to deliver market-beating returns in the near term. Hence, we think investors should wait for a more opportune time to invest in the stock.

Want More Great Investing Ideas?

“MUST OWN” Growth Stocks for 2021

How to Ride the NEW Stock Bubble?

5 WINNING Stocks Chart Patterns

Why Are Stocks Struggling with 4,000?


F shares were trading at $12.37 per share on Tuesday afternoon, up $0.22 (+1.81%). Year-to-date, F has gained 40.73%, versus a 5.79% rise in the benchmark S&P 500 index during the same period.

About the Author: Imon Ghosh

Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
FGet RatingGet RatingGet Rating

Most Popular Stories on

:  |  News, Ratings, and Charts

Bull Run or Bull S#*t?

The S&P 500 (SPY) has impressively broken out above 4,000. However, it seems that ONLY large caps are moving higher while smaller stocks are actually in the red. Why is this? And what does it mean for the future health of this bull market? Read on below for the answers…

:  |  News, Ratings, and Charts

3 Shipping Stocks Rated Strong Buy

Shipping stocks are buoyant as the global economy begins its rebound from the economic effects of the COVID-19 pandemic. We think ZIM Integrated Shipping Services (ZIM), Matson (MATX) and Global Ship Lease (GSL) are three companies that are well positioned to benefit from a sector resurgence and, as such, warrant a closer look now by investors. Let’s evaluate these names more closely.

:  |  News, Ratings, and Charts

Top 10 Growth Stocks

Let me prove beyond a shadow of a doubt that we are in the midst of a stock market bubble. Even better, let me explain why stocks (SPY) will rise for another 12-24 months so you can ride it higher and then parachute out at the peak. And just for good measure I will share my top 10 stocks for today’s market. Read on below for more...

:  |  News, Ratings, and Charts

Avoid These 3 Cathie Wood Stocks in April

Cathie Wood’s contrarian investment strategy may not be ideal for short-term, risk-averse investors with limited funds because most of Wood’s bets require a considerable holding period. So, we think Wood favorites Shopify (SHOP), Spotify (SPOT), and Zillow (Z), which could witness a pullback in the near term, are best avoided now.

:  |  News, Ratings, and Charts

Top 10 Growth Stocks

Let me prove beyond a shadow of a doubt that we are in the midst of a stock market bubble. Even better, let me explain why stocks (SPY) will rise for another 12-24 months so you can ride it higher and then parachute out at the peak. And just for good measure I will share my top 10 stocks for today’s market. Read on below for more...

Read More Stories

More Ford Motor Company (F) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All F News