Leading automaker Ford Motor Company (F - Get Rating) hit its 52-week high of $17.97 on November 1, 2021, after reporting impressive third-quarter results and increasing its guidance for its full-year 2021 adjusted EBIT to between $10.5 billion and $11.5 billion. In addition, it announced the resumption of a regular stock dividend in the fourth quarter, with a quarterly payout of $0.10 per share.

Ford’s stock has gained 26.8% in price over the past month and 132.2% over the past year to close yesterday’s trading session at $17.95. However, current semiconductor chip and labor shortages, and supply chain disruptions, could impact its production.

Furthermore, F faces stiff competition in the emerging electric vehicle (EV) space, with several new entrants and mega players vying for market share. So, F’s near-term prospects look uncertain.

Click here to check out our Automotive Industry Report for 2021

Here’s what could influence F’s performance in the upcoming months:

Reasonable Valuation

In terms of forward non-GAAP PEG, F’s 0.14x is 85.3% lower than the 0.98x industry average. Likewise, its 0.56x forward P/S is 56% lower than the 1.28x industry average. And the stock’s forward P/B and non-GAAP P/E of 2.07x and 9.63x, respectively, are lower than the 3.71x and 15.40x industry averages.

Unfavorable Analyst Estimates

For the quarter ending March 31, 2021, analysts expect F’s EPS and revenue to decline 48.3% and 0.4%, respectively, year-over-year to $0.46 and $33.41 billion. In addition, Wall Street analysts expect the stock to hit $17.92 in the near term, indicating a potential 0.2% decline.

Poor Profitability

In terms of trailing-12-month EBIT margin, F’s 1.67% is 82.5% lower than the 9.54% industry average. Likewise, its 0.75%trailing-12-month ROTC is 90.2% lower than the 7.70% industry average. Moreover, the stock’s 1.13% trailing-12-month ROTA is 81.9% lower than the 6.26% industry average.

POWR Ratings Reflect Uncertainty

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

Our proprietary rating system also evaluates each stock based on eight distinct categories. F has a D grade for Stability, in sync with its beta of 1.05.

F has a C grade for Growth, which is in sync with unfavorable analyst estimates. In addition, the stock has a C grade for Quality, in sync with its lower-than-industry profitability ratios.

F is ranked #24 out of 63 stocks in the D-rated Auto & Vehicle Manufacturers industry. Click here to access F’s ratings for Sentiment, Value, and Momentum as well.

Bottom Line

The ongoing chip and labor shortage could lead to unexpected delays and production constraints. In addition, F faces stiff competition in this overcrowded EV market. Therefore, it could be wise to wait for a better entry point in the stock.

How Does Ford Motor (F) Stack Up Against its Peers?

While F has an overall POWR Rating of C, one  might want to consider investing in the following Auto & Vehicle Manufacturers stocks with an A (Strong Buy) rating: Suzuki Motor Corporation (SZKMY - Get Rating), Daimler AG (DDAIF - Get Rating), and Bayerische Motoren Werke Aktiengesellschaft (BMWYY - Get Rating).

Click here to checkout our Electric Vehicle Industry Report for 2021

F shares were trading at $17.96 per share on Tuesday afternoon, up $0.01 (+0.06%). Year-to-date, F has gained 104.32%, versus a 24.61% rise in the benchmark S&P 500 index during the same period.

About the Author: Nimesh Jaiswal

Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...

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