The brand new yr may carry some extra losses for Ford Motor , in line with Jefferies. The funding financial institution downgraded shares to underperform from maintain and minimize its value goal by $3 to $9, implying greater than 13% draw back potential. This comes as shares of the automaker have slumped almost 15% this yr and greater than 5% over the previous month. On Monday, the inventory fell virtually 2% throughout premarket buying and selling following the decision. F YTD mountain F, year-to-date Though there may very well be some “delicate reduction” for the corporate with presumably loosened emissions rules beneath President-elect Donald Trump, analyst Philippe Houchois cited considerations of stock overhang as a key concern forward. “De-stocking has change into an overhang with US stock drifting as much as 96 days (+1 in November, 26/18 days above GM/STLA) regardless of stable US gross sales +15% (+4% ytd),” the analyst wrote to shoppers on Monday. “Sustained manufacturing helps the decreased 2024 steerage however suggests a tougher begin to 2025.” Together with that, Houchois mentioned Ford faces a number of different challenges, corresponding to resizing its presence in Europe or exiting the area fully in addition to a rising hole between its guarantee provisions and money outflows over the previous few years. “The steadiness sheet is powerful slightly than sturdy and potential claims from restructuring and guarantee depart little money for shareholders if Ford desires to keep up a conservative monetary profile,” he additionally mentioned. One other fear for Houchois is valuation. “Ford’s valuation premium has eroded over time however shares continues to commerce at a premium to GM, we assume due to a higher potential for enchancment even after a couple of false begins. On our 2025 estimates, Ford is buying and selling on 3.7x adj EBIT, 6.2x earnings and FCF yield of 9,” he mentioned. Nearly all of Wall Avenue has taken a extra impartial stance on the identify. Whereas Houchois’ name is among the many 4 out of 26 complete analysts overlaying it who’ve an underperform or promote score, 16 have a maintain score, in line with LSEG information. Even nonetheless, its common goal of $11.63 truly displays about 12% upside from its newest shut.
