Ford stock price staged a strong comeback this year as fears about Donald Trump’s tariffs and China’s rare earth restrictions faded. It has soared by over 61% from its lowest point this year, bringing its market capitalization to over $52 billion.
Ford Motor business is doing modestly well
Ford, one of the biggest automakers in the United States, is doing modestly well as challenges in the auto industry remain.
The most recent results showed that the company sold over 1.15 million units in the third quarter, up from the 1.09 million it sold in the same period last year.
Its deliveries in the first nine months of the year jumped by 1% to 3.2 million. This growth happened even as the American economic growth slowed and the unemployment rate rose to 4.3%.
Ford Motor’s revenue jumped to a record $50.5 billion in the third quarter from the previous $46.2 billion. Its net income margin jumped from 1.9% to 4.6%
Ford’s growth has been driven by its Ford Blue and Ford Pro businesses, which was offset by the performance of its Model e. Its Ford Blue is made up of its gas and hybrid vehicles, which are seeing more demand in the United States. Its revenue rose to $28 billion.
Ford Pro is made up of its asset-light commercial vehicles, and its revenue rose to $17 billion. On the other hand, Ford’s electric vehicle segment remains under pressure, with its EBIT margin remaining in the negative segment.
Ford is also seeing stable growth in its credit business, whose auction values rose to $32.195.
The recent results brought its nine-month revenue to $141.3 billion, up by 3% from the same period last year. However, its core profitability metrics dropped because of the impact of Donald Trump’s tariffs.
One of the main challenges the company has faced is the Novis aluminum factory fire in New York. The company believes that the fire will cost it between $1.5 billion and $2 billion. It hopes to offset its performance by shifting some manufacturing to Michigan and Kentucky.
Analysts expect the upcoming results to show that its revenue will drop by 7.8% YoY to $41.39 billion because of the fire. This will bring its annual revenue to $174 billion and the EPS to $1.03. Its EPS will move to $1.41 in the next financial year.
Ford stock price will likely continue doing well because of its cheap valuation, with its forward price-to-earnings ratio being 12.77, lower than the sector median of 17. Also, the company has a high dividend yield of 5.7% and it will benefit from the latest China and US deal that ensures rare earth materials supply.
Ford stock price technical analysis
The daily timeframe chart shows that the Ford share price bottomed at $8.2 in April as the trade war escalated. It then rebounded and hit a high of $14 after the recent earnings.
A closer look shows that the stock formed a cup-and-handle pattern on the daily timeframe chart. It has also formed a cup-and-handle pattern, which is a common continuation pattern.
Therefore, the most likely Ford stock price forecast is bullish, with the initial target being $15. A move above $15 will push it higher, potentially to the psychological level at $20. A move below the key support at $12.50 will invalidate the bullish outlook.
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