On Thursday, Freedom Capital Markets reaffirmed their Buy rating on Ford stock (NYSE:F) with a steady price target of $17.00. Currently trading at $9.36, near its 52-week low of $9.49, Ford’s stock shows significant potential upside according to InvestingPro analysis, which rates the company’s overall financial health as ’FAIR’. The automotive giant concluded 2024 with a robust fourth quarter but set a cautious tone for 2025 with lower-than-anticipated financial guidance. Despite this, Ford reported an adjusted EBIT of $10.2 billion for 2024, which, although at the lower end of its initial forecasts, remained roughly on par with the previous year’s results.
Looking ahead, Ford anticipates an adjusted EBIT for 2025 to range between $7.0 billion and $8.5 billion. This projection falls approximately 15% below the current market consensus. The company’s guidance suggests a conservative outlook for the year, as it prepares to navigate through various market challenges, reflected in its above-average volatility with a beta of 1.64.
In a more positive light, Ford declared a regular quarterly dividend of $0.15 per share, supplemented by an additional $0.15. This decision brings the total payout for 2024 to $0.75 per share, translating to an attractive yield of 7.79%. InvestingPro data shows Ford has maintained dividend payments for 13 consecutive years, with several more dividend-related insights available to subscribers.
Freedom Capital Markets’ analysis includes a comparison of Ford’s adjusted EBIT margin from 2010 through to the projected midpoint for 2025. Trading at a P/E ratio of 10.55x, the firm’s continued endorsement of a Buy rating indicates confidence in Ford’s long-term financial health, despite the near-term headwinds reflected in the company’s conservative guidance for the coming year.
In other recent news, Ford Motor Company has been in the spotlight due to a series of developments. The company’s U.S. sales dipped 6.3% in January, attributed to a decrease in demand for internal combustion engine vehicles. However, sales of Ford’s electrified vehicles saw an increase, with about 20% more units sold.
Further, Ford disclosed an expected pre-tax gain of approximately $0.7 billion in the fourth quarter of 2024 due to pension adjustments. This gain is expected to boost the company’s net income by around $0.4 billion after tax.
In the political landscape, President Trump’s announcement to impose 25% tariffs on Canada and Mexico could potentially impact the trade dynamics for U.S. automakers like Ford. The specifics of the tariff plan, however, remain undisclosed.
The Consumer Financial Protection Bureau also reported that auto repossessions have surpassed pre-pandemic levels, highlighting growing consumer risk in the auto loan market. This development might affect the overall auto industry, including Ford.
Lastly, Barclays (LON:BARC) analyst Dan Levy downgraded Ford shares from Overweight to Equalweight and reduced the price target, citing increased uncertainty in the automaker’s earnings profile. Despite the potential for cost reductions, the path to narrowing the cost gap compared to competitors was found unclear. These recent developments shed light on the evolving dynamics surrounding Ford Motor Company.
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