By Dhirendra Tripathi
Investing.com – Ford Motor (NYSE:F) shares rose 3% Thursday on positive sentiment created by two brokerages upgrading it to a buy and setting higher price targets.
Under Wolfe Research analyst Rod Lache’s outperform, Ford’s share is seen at $15, a 25% increase from its current level of $12. He believes the company could get a re-rating soon, similar to the one experienced by General Motors (NYSE:GM) last year.
Deutsche Bank (DE:DBKGn) analyst Emmanuel Rosner added Ford to a catalyst call buy list and now sees the stock at $13 from $12 earlier.
According to Wolfe’s Lache, analysts have "clear reasons to gain confidence in the company’s terminal value, and growth.”
Lache sees Ford exiting manufacturing in South America by the end of this year, largely eliminating losses in Europe while significantly improving its performance in China.
“We expect Ford to lay out a plan to achieve competitive costs for EVs. And we also believe that Ford is positioned to set new benchmarks (amongst legacy OEMs) in vehicle architectures and internal software competency,” Lache wrote.
Deutsche’s Rosner believes that even if Ford lowers its full-year guidance due to second quarter production disruptions, “we would use any weakness in the stock post earnings as an opportunity to add to positions ahead of the company's investor day, expected later this spring."
The company will release its first quarter earnings on April 28.
Announcing the fourth quarter 2020 earnings on February 4, Ford CFO John Lawler said the company was on course to earn $8 billion to $9 billion in adjusted earnings before interest and taxes – including a $900 million non-cash gain on its investment in electric vehicle maker Rivian – and generate $3.5 billion to $4.5 billion in adjusted free cash flow in 2021.
The outlook anticipated continued EBIT improvement in each of Ford’s regional businesses, except South America. Ford owns 10% stake in Rivian.