Detroit’s Ford Motor (NYSE:F) will be hosting its capital markets day on Monday, where the automotive giant has promised to detail their plans to meet its previously announced targets for 8% EBIT margin target for its electric vehicle division and a production run rate of 2 million electric vehicles by 2026, a significant increase from the projected 600,000 by the end of this year.
“We will take you through why we believe that 8% margin is totally realistic despite all the pricing pressure that we will absolutely get because everyone wants to grow,” CEO Jim Farley said during the company’s first-quarter earnings call earlier this month.
The event, named "Delivering Ford+," refers to Farley's endeavors to revitalize and restructure the company, which some have criticized for not being executed quickly enough. Farley introduced his plan in May 2021, approximately seven months after assuming position.
Ford said early Monday that it is maintaining its 2023 guidance of between $9 billion to $11B in adjusted EBIT and about $6B in adjusted free cash flow.
Farley described the capital markets day as an opportunity to demonstrate how the strategy is “coming to life.” The company is expected to present detailed analyses of the profit walks for its conventional "Ford Blue" and "Ford Pro" commercial ventures, along with its electric vehicle unit known as "Model e.".
Ford is also expected to offer a sneak peek into its upcoming second-generation battery products and technology during the event. The company has emphasized that these advancements will play a vital role in attaining the targeted 8% EBIT margin. However, it is worth noting that the electric vehicle business is projected to incur a loss of approximately $3B in the current year.
“There’s definitely some analysts that are skeptical,” Morningstar analysts told CNBC. “I think Monday is an opportunity to try and convince some of those skeptics that it can happen. I’m personally willing to give them the benefit of the doubt on that … you’ve got to win people over.”
Analysts don’t expect much movement in the stock from the event unless Ford surprises with a new product or changes in previously announced plans.
“Overall, we think Ford’s key targets are unlikely to be different from its recent teach-in session, but management will attempt to give investors more comfort around them,” Deutsche Bank analysts said Wednesday in an investor note, reiterating the firm’s sell rating on the stock.
Shares of F are up 0.17% in pre-market trading on Monday.