Ford Soars 30% YTD After Breaking Out: What's Next?

Key Points

• Ford's stock has surged 30% YTD, propelled by a recent breakout from a bullish wedge pattern.
• The company's ability to establish a base above previous resistance levels will be important in determining its future performance. 
• Ford's diverse product lineup and ambitious plans in the EV market position it for continued growth, despite mixed views from analysts. 

The renowned American automaker Ford Motor Company NYSE: Fhas been making significant progress in the market this year, with its stock up over 30% YTD. Shares of Ford recently broke out of a wedge pattern on a higher time frame and experienced impressive follow-through momentum. The stock has risen 22% in the last month alone, accounting for most of its YTD performance.

Ford Motor Company is the 4th largest auto manufacturer in the world. The company's diverse lineup, including popular models such as the Ford Mustang and Ford F-150, has garnered a loyal customer base over the year. The company's F-series of trucks has been the world's best-selling pickup truck for decades, and the company now plans to dominate the EV market with its new all-electric Lightning F-150 truck. The company pledged to spend up to $50 billion on EV infrastructure by 2026 as it plans for an all-EV future.

The Breakout In Ford

Year-to-date, shares of Ford have risen about 30%, primarily due to the recent breakout. Since the beginning of the year, shares of Ford consolidated in a bullish wedge pattern, with a contracting range and underperforming the overall market. However, in June, the automaker's shares climbed above the wedge's resistance and held firmly over the all-important level of $12.5, signaling a breakout and directional move.  

The stock has experienced bullish momentum above the resistance and the 200-day SMA. Importantly, F made a higher low near $14, signaling that buyers had stepped up to firmly support the stock, leading to a higher second leg and a current price of $15.20.

If the stock can find support and put in another higher low above the previous resistance, $15, then a further leg toward the next level of resistance, $16 - last tested in August 2022, could be on the cards soon. 

Ford Earnings And Outlook

The company reported results in May and topped analysts' estimates by $0.27 when they reported EPS of $0.63. Revenue for the first quarter was up 21.4% compared to the same quarter last year. Despite the beat, the company maintained its previously announced full-year guidance and expects full-year adjusted earnings between $9 billion and $11 billion.
The company expects to lose close to $3 billion from its EV operations in 2023 as it looks to ramp up production. Ford is expected to report its next quarterly earnings report on Thursday, July 27th, 2023.

Analysts Are Mixed

Analysts are currently mixed on the name with a consensus rating of Hold, based on 14 analyst ratings. The consensus analyst price target is $14.78, predicting a 2.8% downside in the stock. Month over month, the consensus price target has risen from $14.52 to $14.78. Most recently, on June 5th, Citigroup Upgraded F from Neutral to Buy and increased its price target from $12.80 to $16, predicting a 26.18% upside in the stock. Six of the fourteen ratings are a Buy, five a Hold, and three a Sell.

Should You Invest In Ford?

Ford has shown impressive performance lately in the market, with its stock surging over 22% in the past month alone. The recent breakout from a higher time frame, bullish wedge pattern, and bullish momentum have been pivotal to the recent success.

From now on, the stock's ability to find support and establish a base above the previous resistance will be crucial in determining whether the move will have further legs and maintain an uptrend.