Is Ford Stock A Buy Now? Automaker Drops Below Key Level After EV-Fueled Surge

3 months ago 28
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Ford Motor (F) began the caller decennary with optimism arsenic it emerged from a cardinal firm redesign to vie successful the epoch of astute vehicles and cleanable energy. The automaker is investing heavy successful caller technologies to support gait with competitors successful the markets for autonomous vehicles, thrust sharing and electric cars. But is Ford banal a bargain now?


The unveiling of the Mustang Mach-E successful November 2019 was a cardinal milestone successful the company's pivot toward what it called "the integer future." The Ford Mustang Mach-E, an all-electric crossover, made its commercialized debut successful the U.S. precocious past year. Ford is opening accumulation of the Mach-E, a rival to the Tesla (TSLA) Model Y, successful China arsenic well. And Ford didn't halt astatine electrification with a crossover — it present has an electrical mentation of the F-150 arsenic well.

This caller aboriginal besides includes a pivotal tech concern with Alphabet (GOOGL)-owned Google and a slew of different caller conveyance launches. Among them: a resurrected Ford Bronco brand. Additional strategical partnerships include Volkswagen (VWAGY), Rivian and Mahindra to fortify Ford's planetary presence.

After a prolonged downtrend, Ford banal has been connected a large tally from 202o lows, on with adjacent General Motors (GM). If you're reasoning astir buying shares of Ford, it's cardinal to analyse the cardinal and method representation first.

Mustang Mach-E Named EV Of The Year

Ford snagged Car and Driver's 2021 EV of the Year award. The magazine, which publishes an yearly database of champion autos, singled retired the Mustang Mach-E arsenic its apical prime successful the electric car category.

"For caller EV converts, piloting a Mach-E isn't truthful antithetic from driving a gas-burning SUV," said the July 7 reappraisal from Car and Driver. "It's the close car to bring drivers on during this watershed infinitesimal arsenic EVs modulation from niche alternate to caller normal."

Though the Ford Mach-E took apical honors implicit rival Tesla, Ford banal fell contempt the news. Shares are present pulling backmost toward their 50-day moving average.

Ford Puts More Money Into EVs

Ford outlined plans to summation investments successful electrical vehicles astatine its yearly capitalist time connected May 26. The automaker besides expects costs of EV batteries to driblet sharply. Ford banal rose.

Spending related to EV initiatives is expected to turn to much than $30 cardinal by 2025. The car institution antecedently planned an concern of $22 cardinal connected EV development. Ford expects astir 40% of its planetary conveyance measurement to beryllium electrical by 2030.

"This is our biggest accidental for maturation and worth instauration since Henry Ford started to standard the Model T, and we're grabbing it with some hands," CEO Jim Farley told investors connected May 26.

Acquires Battery Charging Startup

Ford connected June 17 announced the acquisition of Electriphi. The California-based startup provides battery-management and charging solutions. The woody is expected to boost Ford's capabilities to make artillery charging and absorption services arsenic it ramps up electrification efforts. Ford banal fell slightly.

"With Electriphi's existing precocious exertion IP successful the Ford Pro electrical vehicles and services portfolio, we volition heighten the acquisition for commercialized customers and beryllium a single-source solution for fleet-depot charging," Ford Pro CEO Ted Cannis said successful a June 17 statement.

Ford Pro projects the charging depot conception could turn to 600,000 vehicles by 2030 and bring an further $1 cardinal successful gross successful that aforesaid clip frame.

Ford did not disclose however overmuch it's paying for the San Francisco-based company. But executives accidental the acquisition is portion of Ford's $30 cardinal concern successful electrification efforts. The woody is expected to adjacent by the extremity of June.

Ford Launches Lightning F-150 EV

Ford connected May 19 officially debuted its electrical pickup truck, the F-150 Lightning. Just a time earlier, President Joe Biden visited a Ford works successful Michigan to tout his $174 cardinal electric-vehicle program and instrumentality Ford's electrical motortruck for a trial drive.

Ford banal surged 13% for the week, signaling investors are bullish astir the income imaginable for the newest mentation of the fashionable pickup model.

"Every truthful often, a caller conveyance comes on that disrupts the presumption quo and changes the crippled … Model T, Mustang, Prius, Model 3. Now comes the F-150 Lightning," CEO Farley said successful a May 10 quality release.

Production of the caller F-150 won't statesman until 2022. The caller exemplary volition vie amid a increasing marketplace lineup of electrical pickups. In summation to Tesla's (TSLA) heavy publicized Cybertruck, GMC and Chevy besides person announced plans to merchandise electrical versions of the Hummer and Silverado motortruck models, respectively.

A Rivian EV pickup launches successful June with GM's Hummer EV retired aboriginal this year. The Tesla Cybertruck is expected to motorboat sometime successful 2022, but it's unclear when.

Ford Stock Earnings

Earnings are starting to crook around, but Ford is hitting a stumbling block. A planetary spot shortage is forcing the automaker to trim its second-quarter accumulation by half. Ford banal crumbled 9.4% connected that quality successful precocious April, contempt the institution reporting Q1 earnings and gross that crushed estimates.

Wall Street expected Ford to study net of 14 cents a stock connected gross of $32.63 billion. Yet beardown net were offset by quality that Ford volition chopped its Q2 accumulation levels by 50%. Current CEO James Farley hinted that the spot shortage volition get worse earlier the outlook improves.

"We judge our 2nd 4th volition beryllium the trough for this year," Farley said connected the net call. "We person enactment to bash to get our manufacture footprint backmost to firing connected each cylinders."

Ford's adjacent quarterly study is owed connected July 28. Wall Street expects the automaker to present a nonaccomplishment of 27 cents per stock connected gross of $21.99 billion.

Will Chip Shortage Force Redesign?

Part of assessing that manufacture footprint includes a imaginable car constituent redesign to displacement to much accessible chips. A planetary shortage has hamstrung the car industry, forcing cutbacks successful accumulation quotas. Ford is curtailing accumulation by fractional successful Q2 and said successful past month's net that the contented could outgo the automaker $2.6 cardinal this year.

During Ford's annual shareholder meeting connected May 13, CEO Farley said the institution is weighing aboriginal strategies to woody with spot woes. Some of these strategies see redesigning car components to enactment with much accessible chips and cutting proviso deals straight with spot foundries.

Ford EV Sales Set New Record

Ford's absorption connected EVs is translating to accrued sales. Electric-car sales surged 117% to a first-half grounds successful June. The Mustang Mach-E outsold the gas-powered Mustang for the archetypal time, notching 12,975 full sales. F-150 PowerBoost hybrid income totaled 17,039 vehicles.

Reservations for the caller afloat electrical F-150 deed the 100,000 mark, according to July 2 totals released by the automaker.

Record EV income proceed a affirmative inclination for Ford, topping an all-time monthly grounds successful May. That month, the automaker saw electric-vehicle income summation 186% to deed a monthly full of 11,172 vehicles. Those numbers were boosted by the popularity of caller merchandise offerings similar the Mustang Mach-E and F-150 hybrid.

Google Partnership Lifts Ford Stock

Key tech partnerships are portion of Ford's strategy arsenic well. Ford banal gained 2.9% connected Feb. 1 aft CEO Farley announced the 117-year aged automaker is partnering with tech elephantine Google. The Michigan-based carmaker and Alphabet-owned institution volition signifier a caller collaborative radical called Team Upshift.

"We're going to leverage the endowment and assets of some companies to propulsion the boundaries of Ford's transformation," Ford Motor wrote successful a institution blog post. "This whitethorn see projects ranging from modernizing our plants done imaginativeness AI, processing caller retail experiences erstwhile buying a vehicle, creating caller ownership offers based connected connected conveyance data, and more."

In summation to the associated venture, the woody volition marque Google the preferred unreality work for the Detroit automaker.

New Ford CEO Takes The Helm

On Oct. 1, COO James Farley took the helm arsenic Ford's CEO. His tenure began with a shake-up of cardinal enactment roles. Ford announced Tim Stone is vacating his relation arsenic CFO. He replaced John Lawler, who precocious oversaw Ford's autonomous conveyance unit.

Along with Farley's caller presumption came a ramp-up successful Ford's intent to put much successful emerging technologies, including autonomous vehicles, electrical cars and software-as-a-service capabilities. Ford banal investors person welcomed the changes, with shares astir doubling from past October done aboriginal February.

Farley stepped successful aft disappointing results successful Hackett's three-year bid to reshape the automaker. The centerpiece of Hackett's tenure was an $11 cardinal restructuring plan. That program ran into large roadblocks erstwhile Ford botched the redesign and motorboat of its fashionable Explorer SUV successful 2019.

All successful all, Ford banal declined astir 60% during Hackett's clip arsenic CEO.

In summation to C-suite changes, Ford announced past July it was resurrecting its iconic enactment of Ford Bronco SUVs. Production of the caller Bronco lineup volition see two-door and four-door models, arsenic good arsenic a smaller Bronco Sport edition. Consumers tin present spot immoderate of the caller Bronco models, acceptable to deed showrooms successful May 2021, online.

Bronco Relaunch Part Of New Strategy

The relaunch of the Bronco SUV — which was discontinued successful 1996 — is portion of Ford's wide strategical inaugural to capitalize connected its iconic marque lineup to boost U.S. gross and earnings.

Ford President of the Americas & International Markets Group Kumar Galhotra told CNBC past July helium expects yearly portion income of the caller Ford Bronco bid to beryllium "in the hundreds of thousands." The Bronco SUV household is acceptable to straight vie against the fashionable Jeep marque owned by Fiat Chrysler (FCAU).

The revival of the fashionable Bronco conveyance models came conscionable weeks aft the Detroit-based car institution unveiled details of the latest mentation of its top-selling Ford F-150 pickup motortruck successful precocious June. The motortruck is the archetypal Ford conveyance to enactment over-the-air bundle updates, archetypal pioneered by Tesla (TSLA) successful 2012.

Ford Stock Fundamental Analysis

To find whether Ford banal is simply a bargain now, cardinal and method investigation is key.

The IBD Stock Checkup tool shows Ford banal has an IBD Composite Rating of 79 retired of a best-possible 99. The standing means Ford banal ranks comparatively good vs. each stocks, but not outstanding, successful presumption of the astir important cardinal and method stock-picking criteria.

Ford banal has an EPS Rating of 71 retired of 99, which compares quarterly and yearly earnings-per-share maturation with each different stocks. While that people could beryllium better, it has improved since the past quarterly report. Ford has a spotty net way record, with galore quarters of net declines implicit the past decade. But forward-looking estimates are pointing to growth.

The rankings spot the carmaker successful the No. 2 spot vs. its automotive manufacture peers. IBD's automaker radical is ranked a dismal No. 194 retired of the 197 manufacture groups tracked by IBD. In general, it's perfect to absorption connected apical stocks successful the apical quartile of IBD's groups, but the marketplace underperformance from Tesla this twelvemonth successful peculiar is weighing the ranking.

Ford Stock Technical Analysis

A wide marketplace pullback successful mid-July sent Ford banal southbound of a cardinal enactment level. Shares tumbled 6% the week of July 16, triggering a beardown merchantability awesome with a definitive interruption of the 10-week line.

Before that, Ford banal had been investigating enactment astatine the 10-week line. Pullbacks to that level tin beryllium a captious test— they tin either people a buying accidental if a banal finds support, oregon cue selling if the banal loses support.

Another merchantability signal? Shares round-tripped a double-digit gain.

Ford banal went connected a large tally earlier this summer. Shares broke retired of a level basal successful precocious May and deed the 20% nett portion wrong 2 weeks. Then, Ford started pulling back.

A rebound disconnected the 21-day exponential moving mean connected June 21 was a imaginable buying accidental for existing shareholders to adhd to their positions. While that was a pugnacious hold, different introduction accidental came arsenic Ford banal tested enactment astatine the 50-day enactment and its anterior 13.72 bargain constituent connected July 7.

While these alternate entries yet didn't work, investors who utilized closes beneath the 21-day and 50-day enactment levels arsenic their exits were capable to decently negociate their risk.

Consider Ford's Relative Strength

It's besides important to see Ford's comparative terms performance. Ford's comparative spot enactment — which measures a stock's terms show vs. the S&P 500 — is backmost beneath its short-term highest successful mid-March.

IBD's probe shows the value of focusing connected stocks outperforming the market. While Ford's RS enactment is disconnected caller highs, it's mean enactment for a banal successful the process of forming a caller base. Investors should support an oculus connected Ford's show vs. the S&P 500 arsenic it seeks to find a bottom.

Ford Stock: A Buy Now?

On a monthly chart, Ford banal is breaking supra its semipermanent downtrend going backmost to 1999. Looking astatine the play chart, shares person made a large determination disconnected 2020 lows. Ford broke retired of a level basal successful precocious May and is investigating a cardinal level.

As for the fundamentals, Ford income and profits are rebounding. The institution is moving much into electrical vehicles, too. However, spot shortages are weighing connected Ford and the full car industry.

Bottom line: Ford banal is simply a not bargain now. Shares are astir 9% beneath their 10-week moving average. Last week's decisive adjacent beneath the 10-week was a merchantability awesome for investors.

At this juncture, investors should hold for Ford banal to signifier a caller basal earlier initiating a position.

To find the champion stocks to bargain and watch, cheque retired IBD's Stock Lists page. More banal ideas tin beryllium recovered connected our Leaderboard and MarketSmith platforms.


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