On Wednesday, Wolfe Research adjusted its stance on Ford Motor Company (NYSE:F), upgrading the automaker’s stock rating from Underperform to Peer Perform. The change in rating comes as Ford shares have demonstrated resilience compared to the broader market and its direct competitors. With a market capitalization of $40.36 billion and trading at a P/E ratio of just 6.84, InvestingPro analysis suggests Ford is currently slightly undervalued.
Ford’s stock has notably outperformed the S&P 500 year-to-date, with a decline of only 5% compared to the S&P 500’s 10% drop. Additionally, Ford has surpassed its Detroit Three (D3) peers, with General Motors (NYSE:GM) and Stellantis (NYSE:STLA) experiencing declines of 17% and 29%, respectively.
The upgrade is partly attributed to Ford’s limited exposure to tariff risk, which stems from its predominantly U.S.-based manufacturing operations. This positioning may provide Ford with a competitive edge, especially in light of recent tariff developments.
Wolfe Research acknowledges that the original concerns leading to the cautious stance on Ford’s stock, such as cyclical risks and potential pressure on shareholder returns due to cash burn, are still present. However, the firm believes that the current tariff environment could present Ford with a significant competitive advantage, prompting the upgrade to a Peer Perform rating.
The analyst’s commentary highlights the automaker’s relative insulation from international trade risks and the potential benefits Ford could reap from the current tariff situation. This upgrade reflects a shift in Wolfe Research’s outlook on Ford’s stock performance in the near term.
In other recent news, Ford Motor Company has declared a regular dividend of 15 cents per share for the second quarter, to be paid on June 2 to shareholders of record by May 12. This decision aligns with Ford’s ongoing strategy to return value to shareholders through periodic dividends. Meanwhile, Citi has initiated coverage on Ford with a Neutral rating and a $10 price target, citing challenges such as uneven production in North America and losses in electric vehicle production. The firm noted that these issues may lead to uncertain guidance for Ford until tariff clarity is achieved.
Additionally, Ford has halted the export of luxury vehicles, including the F-150 Raptors and Lincoln Navigators, to China due to increased tariffs resulting from the U.S.-China trade dispute. These tariffs have risen to as much as 150%, prompting Ford to pause shipments. In related industry news, Deutsche Bank has downgraded General Motors from Buy to Hold, adjusting the price target from $58 to $43, due to concerns over U.S. industrial and tariff policies. The analysts believe that both General Motors and Ford may need to retract their full-year guidance to address these challenges.
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