Morgan Stanley analyst Adam Jonas had an Overweight rating on Ford Motor Co
Ford's solid 2Q beat and upped fiscal year guidance driven by a substantial margin and cash flows from Blue and Pro despite raising Model e (EV) loss estimate by 50% to $4.5 billion (a loss of nearly $40k/unit).
The analyst expects significant changes to Ford's EV strategy may be necessary.
Jonas assumed Ford normalized at 4.2 million units with average transaction pricing (ATP) of $42.5k, with $~10 billion of ancillary revenues. Assuming a 5.5% normalized adjusted EBIT margin 23% tax rate, he took $1.80 of normalized EPS. The analyst assumed an 8.7x normalized PE Multiple.
Last week, Ford announced its second-quarter revenue of $45.0 billion, reflecting a notable 12% year-over-year increase, beating the Street consensus estimate of $40.38 billion. During the same period, the company reported earnings per share of 72 cents, surpassing the analyst consensus estimate of 55 cents per share.
The company cited industry-wide pricing pressure and investments in capacity and new products for the profitability weakness.
Jefferies analyst Philippe Houchois downgraded Ford Motor from Buy to Hold and lowered the price target from $17 to $15.
Also, last week, Ford recalled 870,000 F-150 trucks in the U.S. wing to the activation of the electric parking brake due to a possible wiring issue.
The recall covered F-150 trucks from 2021 through 2023.
F Price Action: F shares are trading lower by 1.28% to $13.10 on the last check Monday.
