With all the focus on the electric vehicle market these days, it's easy to forget about Ford (NYSE:F), which remains one of the biggest names in gas-powered vehicle making today. Ford isn't letting the growth in the electric vehicle market pass by unchallenged, though, and its efforts at capturing a piece of that growing market are being recognized by market analysts.
One Big Upgrade Drives New Gains
The latest word features analyst Barclays, who bumped Ford up from “equal weight” to “overweight”, did so primarily based on Ford's latest moves to capture a piece of the explosively-growing electric vehicle market. The recent move to team up with Volkswagen (OTCMKTS:VWAGY) to produce electric vehicles certainly helped, and Ford's improving outlook in margins also proved fodder sufficient for the upgrade.
Moreover, Barclays—via analyst Brian Johnson—also bumped up the price target on Ford, and in a big way. While Barclay's original price target on Ford was $3 per share, the recent moves prompted a major hike, taking the target up to $16 per share. That's not only a five-fold change, it also represents a Wall-Street high, suggesting that Barclay's is looking for a near-term gain of around 28%, reports noted.
Such a move may seem drastic, but some recently-posted numbers offer worthwhile motivation. For instance, Ford's car sales numbers for February were down 14.1% against the same time last year, but its electric vehicle sales were up 56.1%, leading Ford to post its largest numbers on record. The launch of the Bronco Sport and the Mustang Mach-E, which is a completely electric car, helped drive gains and give Ford ultimately around 12% of the electric vehicle market by itself, reports noted.
Analysts Turning Increasingly Bullish
Meanwhile, the broader analyst pool—as based on our latest research—is following in Barclay's footsteps and growing increasingly bullish on Ford. While the company has been rated a “hold” for the last six months, the ratios powering that rating are on the rise toward bullish.
Six months ago, the company had three “sell” ratings, 10 “hold” and five “buy” to its credit. Three months ago, that shifted a bit toward bullish as one of the “hold” ratings departed. Then, a month ago, one of the “sell” ratings departed, as did two more of the “hold” ratings. Today, we stand at two “sell” ratings, six “hold” ratings, and six “buy” ratings, which shows movement away from both “sell” and “hold” and movement into “buy.”
The price target, meanwhile, has been increasing regularly, and surprisingly consistently. Six months ago, the price target stood at $7.90. Three months ago, it jumped to $8.98. A month ago, it jumped again, this time to $9.96. That brings us today, where the pattern is actually broken, as the company settles into a price target of $10.46 per share. That actually represents the first element of downside risk seen in a while, as shares of Ford currently sell at $12.62.
A Rough Road Ahead With Some Brighter Potential Stops
Ford, right now, is starting to look like “National Lampoon's Vacation.” There are plenty of pratfalls ahead, and some serious potential disasters lurking, but there's also one great big potential payout ahead. For instance, Ford's recent plan to start building a line of electric vehicles in Mexico was met with serious resistance by the United Auto Workers, who, in a letter to members, referred to the measure as “corporate greed.” Further, the ongoing semiconductor shortage, which is wreaking havoc throughout the electronics industry, is also hampering production. Ford has reportedly canceled shifts at two of its plants, and is actually building Edge SUVs and F-150 pickups without certain parts just because they're not available. While reports suggest the models will be finished later, when the parts are available, it's still a blow for anyone watching Ford.
However, there is one big payout possibly ahead for Ford: a slice of the electric vehicle market. Estimated by some to be in the $5 trillion range, any slice of a market that big is going to be a substantial slice objectively, and give Ford a serious boost to its fortunes. Moreover, the familiar Ford branding may serve to pull in customers who weren't all that interested in buying in on electric vehicles to begin with. It's one thing to look into a Tesla (NASDAQ:TSLA) or a Nio (NYSE:NIO), but for those who are more familiar with a Ford-branded vehicle, that could encourage them to step in where they wouldn't have otherwise.
Ford is gaining ground in a big way in electric vehicles. While certainly, it won't be out of the gas-powered market any time soon, there are gains to be had in electric. Ford's move to keep hands in both markets should serve it well going forward and mean solid returns for investors as well
If a company's CEO, COO, and CFO were all selling shares of their stock, would you want to know?
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