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?
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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 coming aboriginal adjacent year.
After a prolonged downtrend, Ford banal is revving up on with adjacent General Motors (GM). But wherever does Ford basal now? If you're reasoning astir buying shares, it's cardinal to analyse the cardinal and method representation first.
Cancels EV Plans With Rivian
Ford announced connected Nov. 19 it's dropping plans to jointly nutrient a conveyance with EV shaper Rivian (RIVN). Both automakers volition alternatively absorption connected processing their ain electrical conveyance projects. Ford banal bounced alongside the news.
Despite the alteration of plans, Ford remains an capitalist successful the blistery EV startup. Ford invested astir half-a-billion dollars successful the Irvine-based EV institution successful 2019. That woody generated a fiscal windfall for Ford aft the blockbuster Rivian IPO debut connected Nov. 10. But the Detroit automaker has besides pivoted absorption to its ain EV lineup since inking that agreement.
Ford Partners With Chipmaker To Boost Supply
Ford has entered the chipmaking business. The automaker connected Nov. 18 announced a concern with U.S.-based GlobalFoundries (GFS) to nutrient semiconductors. The determination comes arsenic much carmakers look to summation power implicit an erratic spot proviso that has hamstrung the car manufacture implicit the people of the pandemic. After an archetypal gain, Ford banal reversed little arsenic car stocks mostly retreated.
Details person yet to look connected the Ford-GlobalFoundries agreement. Rival GM is besides considering collaborating with semiconductor manufacturers to bring much chipmaking backmost to U.S. soil.
Automaker Issues 'Green Bonds'
Ford raised astir $2.5 cardinal connected Nov. 8 aft issuing a bid of "green bonds" to money cleanable vigor projects. These ESG bonds are slated to mature implicit 10 years with an anticipated terms output of 3.625%, according to aggregate quality reports. Ford banal rose.
The caller bonds volition besides assistance the Detroit automaker chopped borrowing costs by astir fractional arsenic it plans to repurchase $5 cardinal of junk-rated debt.
Ford October Sales Up Month-Over-Month
Ford's monthly car sales saw a rebound successful October. Overall U.S. income came successful astatine 175,918 vehicles, down 4% vs. past year. However, that's an betterment implicit September's full of 156,614 vehicles. SUV income deed their highest October levels successful 21 years, according to the automaker. SUV retail income were up 17.4% vs. a twelvemonth agone acknowledgment to beardown income of the fashionable Bronco and Mustang Mach-E models. Ford remained the top-selling U.S. automaker for the 2nd period successful a row. Ford banal roseate connected the news.
EV income continued to interruption records for the Detroit carmaker. Total EV income deed 14,062, representing a year-over-year summation of 195%. The all-electric F-150 notched a full of 160,000 reservations.
Ford Stock Earnings
Ford blew distant estimates successful its Q3 earnings study connected Oct. 27. The automaker recorded adjusted net of 51 cents per share, astir doubling Wall Street projections. Revenue totals clocked successful astatine $35.7 billion. That fig was down moderately from the aforesaid 4th a twelvemonth agone owed to ongoing spot shortages affecting the car industry. Ford banal roseate astir 5% successful after-hours trading.
Executives besides raised Ford's adjusted EBIT to betwixt $10.5 cardinal and $11.5 cardinal for the afloat year.
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 88 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 37 retired of 99, which compares quarterly and yearly earnings-per-share maturation with each different stocks. 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. 4 spot vs. its automotive manufacture peers. IBD's automaker radical is ranked a beardown No. 4 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, and the radical has improved from a near-worst ranking conscionable months agone to articulation the apical 10.
Ford Stock Technical Analysis
Ford banal powered retired of a cupful basal with a beardown net gap-up connected Oct. 28. Shares changeable up arsenic overmuch arsenic 13% earlier settling into the little scope of the terms bar. Still, Ford ended up gaining 8.7% connected that day, with dense measurement down the move. With the banal extending its gains since, shares are present good extended from the due 5% bargain zone.
In fact, shares are hitting the 20%-25% profit-taking portion and person triggered the eight-week clasp rule. Such almighty moves archer you the banal has a large accidental to go an outstanding victor and that it deserves much leeway.
With the banal tightening up astir the 20 terms level, that could mean Ford is mounting up an add-on introduction for existing shareholders.
Ford banal is making a large determination disconnected its August and September lows. EV artillery production-related headlines helped assistance Ford shares supra their downward-sloping 50-day line. An aboriginal introduction for investors could've been erstwhile shares cleared a declining-tops inclination enactment successful precocious September. That coincided with Ford banal getting backmost supra that cardinal moving average.
Consider Ford's Relative Strength
Ford's comparative spot enactment — which measures a stock's terms show vs. the S&P 500 — is adjacent all-time highs.
IBD's probe shows the value of focusing connected stocks outperforming the market.
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 banal has made a large tally since reporting earnings.
Bottom line: Ford banal is simply a not bargain present arsenic shares are extended from the 5% bargain zone. However, it's closing successful connected a three-weeks-tight introduction of 20.61. That'd beryllium a spot for existing shareholders to adhd to their positions.
At this point, investors should hold to spot if Ford banal pulls backmost to connection an alternate introduction earlier getting in. Though Ford banal has triggered the eight-week clasp rule, investors who bought astatine the breakout tin opt to instrumentality partial profits arsenic shares deed the 20%-to-25% nett zone. Those with beardown condemnation successful Ford banal tin clasp to spot if gains tin spell higher.
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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