Analysis of Investment Prospects in Ford Motor Company
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Should l Buy F?
Source: Fool
- Industry Size: The U.S. automotive sector supports over 1 million manufacturing jobs, highlighting its economic significance; however, Ford's limited growth potential may impact long-term investor returns despite this scale.
- Weak Revenue Growth: Ford's automotive revenue from Q3 2015 to Q3 2025 is projected to grow at a compound annual rate of only 2.8%, indicating a mature industry with cyclical demand that leads to poor earnings growth prospects.
- Profitability Constraints: Ford has not demonstrated operating leverage, with high material and labor costs resulting in thin margins, and the company must continually invest in R&D and manufacturing capabilities to remain competitive, further squeezing profit margins.
- Dividend Appeal: While Ford's forward P/E ratio stands at 9.8 and its current dividend yield is 4.37%, attracting value investors, the safety of these dividends is questionable due to the company's exposure to macroeconomic factors affecting demand.
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Analyst Views on F
Wall Street analysts forecast F stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for F is 13.65 USD with a low forecast of 11.00 USD and a high forecast of 16.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
3 Buy
10 Hold
1 Sell
Hold
Current: 13.720
Low
11.00
Averages
13.65
High
16.00
Current: 13.720
Low
11.00
Averages
13.65
High
16.00
About F
Ford Motor Company is an automobile company. The Company develops and delivers Ford trucks, sport utility vehicles, commercial vans and cars, and Lincoln luxury vehicles, along with connected services. The Company’s segments include Ford Blue, Ford Model e, Ford Pro, and Ford Credit. The Ford Blue segment primarily includes the sale of Ford and Lincoln internal combustion engine (ICE) and hybrid vehicles, service parts, accessories, and digital services for retail customers. The Ford Model e segment primarily includes the sale of its electric vehicles, service parts, accessories, and digital services for retail customers. The Ford Pro segment primarily includes the sale of Ford and Lincoln vehicles, service parts, accessories, and services for commercial, government, and rental customers. The Ford Credit segment consists of the Ford Credit business on a consolidated basis, which is primarily vehicle-related financing and leasing activities. Its vehicle brands are Ford and Lincoln.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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