Boosting Ford Price Target After New Pivot Emerges
As the automaker prepares to report, we're taking Wall Street's second highest target price.
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Will there be tariff relief for the automakers or won't there be? Would a series of trade deals, should they come to pass, actually be a net positive for U.S. auto exporters? Maybe.
Would the increased overhead of actually producing more vehicles and auto parts in the U.S. negate any such benefits? So much remains unknown.
Ford F is set to report in about a week and half. What can CEO Jim Farley say? The situation is so fluid. Can he guide? What about electric vehicles? That production has necessarily slowed, not just for Ford, but for all manufacturers?
Seems that enthusiasm for electric vehicles was finite, and those consumers likely to purchase or lease those vehicles have probably already done so.
Expectations
Wall Street is looking for a GAAP EPS of $0.02 from Ford for the first quarter, on about $35.5 billion in revenue. That would compare less than spectacularly to $0.33 for the year-ago period, while reflecting a year-over-year earnings contraction of 11%. The firm had guided three months ago to full-year adjusted EBIT of $7 billion to $8.5 billion and free cash flow of $3.5 billion to $4.5 billion. It would be incredibly positive if the firm were to be able to maintain that guidance for free cash flow.
About a Month Ago...
...I discussed Ford Motor with readers. Readers will see the double-bottom pattern of reversal that I had shown you back then:
I have purchased the stock since that article was written (net basis: $9.61). Readers will see that the shares rallied nicely and then tariff-related volatility simply took over. The stock sold off hard and gave up its 21-day EMA and 50-day SMA. At one point, I was down significantly on this trade. There is no real pattern at the moment.
That said, as trade-related and macroeconomic optimism have crept back into the conversation, the stock has rallied. This week, Ford has taken back its 21-day EMA and 50-day SMA. That got some swing traders, and a few portfolio managers engaged.
I had to adjust and dub the 50-day line my new pivot, which made my target price $12 at the time. Now, the 200-day line once again becomes pivot. At this level, that permits me to increase my current target price to $13 from $12. I believe that this will make my target the second highest on Wall Street for this name, with only John Murphy of Bank America higher. Murphy, who is rated at five stars by TipRanks, has a "buy" rating on Ford but recently reduced his target from $15.50 to $14.
Heads Up!
On Wednesday we updated several "Stocks Under $10" names and former SU$10 names. We mentioned that pivots had been triggered for both Palantir Technologies PLTR and Rocket Lab USA RKLB as we increased our target price for PLTR. PLTR is up 15.6% this week and RKLB is up 10.69%.
We also suggested some (not an exit) profit taking in Peloton Interactive PTON, as that one is now up 16.7% for the week, but we admitted that SoFi Technologies SOFI had not taken back its pivot. That changed on Friday morning as SOFI took down its 50-day SMA. Thought readers should be aware of that. SOFI is now up 17.4% this week. My target price remains $18.50.
At the time of publication, Guilfoyle was long F, PLTR, RKLB, PTON and SOFI equity.
