Ford’s Stock Down 17% in 4 Years – What’s The Latest

Ford's stock price (NYSE: F) has fallen 17% over the past four years, as the firm grapples with the evolving dynamics of the automotive industry while attempting to maintain its legacy strengths. The stock has shown short-term resilience, gaining 5.65% YTD, but sitting against a backdrop of long-term uncertainty means a deeper look is required.

The technical indicators offer a mixed bag. The 50-day moving average at $9.76 sits firmly below the 200 day MA of $10.76, with the ‘death cross' to the downside taking place in August last year. The typical signal to the downside has coincided with a period of sideways trading, with much of the price action taking place between the range of $9-$11.

A look at the 5 year chart on the weekly is not pretty reading for long term bulls. The mid $10 range has provided plenty of resistance in recent tests, and it may take something fundamental for the stock to break through on strength. But can Ford deliver?

The upcoming Q1 2025 earnings report, slated for April 28, 2025, is shaping up to be a pivotal event. The divergence in consensus EPS forecasts is particularly striking, with estimates ranging wildly from a loss of -$0.03 to a profit of $0.47. Revenue projections are similarly broad, spanning from $32.49 billion to $41.05billion.

The company's strong Q4 2024 performance, where it surpassed both EPS and revenue estimates, adds another layer of complexity to the upcoming earnings call. A repeat performance could solidify investor confidence, while a miss could trigger further concerns.

Ford's underlying financial health presents a mixed picture. A market capitalisation of $40 billion, coupled with 2024 annual revenue of $184.99 billion and net income of $5.88 billion, demonstrates the company's scale and established presence. The trailing P/E ratio of 7.02 and forward P/E of 6.97 suggest the stock may be undervalued relative to its earnings, a potential draw for value investors. Moreover, the hefty 5.9% dividend yield offers an attractive income stream, particularly appealing in a lower-interest-rate environment.

However, Ford's ambitious “Ford+” plan, which aims to balance investments in both traditional internal combustion engine (ICE) vehicles and the burgeoning EV market, is facing headwinds. While the company has committed $50 billion to EV development through 2026, recent reports indicate a scaling back of these investments due to weaker-than-anticipated consumer demand and substantial losses in the EV sector. This strategic recalibration highlights the challenges of transitioning to an all-electric future while maintaining profitability in the present.

The Latest Headlines

• Sales Trends: Ford reported a 9% drop in U.S. sales for February 2025, with significant declines in SUV and car sales. However, truck sales rose, and electric vehicle sales saw a 15% increase.
• Tariff Concerns: Potential tariffs on imports, particularly from Canada and Mexico, pose a risk to Ford's profitability. While a temporary exemption has been granted, the long-term impact remains uncertain. Former President Trump proposed tariffs that would negatively affect Ford.
• Quality and Cost Issues: CEO Jim Farley has emphasized the need to improve quality and reduce costs, acknowledging a $7 billion to $8 billion disadvantage compared to rivals. Ford is targeting $1 billion in cost savings for 2025.
• Safety Investigation: An investigation is ongoing from NHTSA impacting 1.3 Million F-150 pickups from 2015 to 2017 due to 138 claims of unwanted downshifting.
• Recall: Ford has had 3 recalls concerning the rear view cameras. These total to 56,000 vehicles. Most can be solved with a software update.

Analyst ratings are predominantly “Hold,” reflecting the cautious optimism surrounding Ford's prospects. Price targets generally suggest modest upside, with some projections reaching $12.04 in 2025 and potentially $15.75 by 2030. However, these forecasts are highly dependent on Ford's ability to execute its strategic plan, manage costs, and successfully navigate the increasingly competitive EV landscape.