VALUATION HIGHLIGHTS
- Ford Blue constitutes 39% of the Trefis price estimate for Ford's stock.
- Ford Pro constitutes 24% of the Trefis price estimate for Ford's stock.
- Vehicle Lease & Loans constitute 11% of the Trefis price estimate for Ford's stock.
WHAT HAS CHANGED?
- Latest Earnings
Ford posted mixed Q3 2024 results. Earnings dropped to $0.22 per share, down from $0.30 a year ago, but the decline was smaller than expected. However, the company cut its full-year guidance, now projecting operating profits of about $10 billion, down from the previous range of $10 billion to $12 billion. This adjustment reflects higher warranty costs and some supply chain issues.
- Ford Scales Back On EV Plans
Ford has scaled back on its EV plans amid tepid demand. The company has abandoned plans to build out 2 million EVs per year by the end of 2026, while also delaying a plan to invest $12 billion in battery-powered vehicles. Ford is also reducing capacity and hiring plans at a new battery manufacturing facility that it is building in Michigan.
POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE
Below are key drivers of Ford's value that present opportunities for upside or downside to the current Trefis price estimate for Ford:
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Ford Blue Volumes: Sales of Ford Blue vehicles rose from around 2.83 million in 2022 to 2.9 million in 2023. Trefis expects the metric to grow to about 3.2 million by 2030. However, if volumes rise to over 3.6 million, there could be a 10% upside to our price estimate.
BUSINESS SUMMARY
Ford Motor Company is a global automotive company headquartered in Dearborn, Michigan, USA. It manufactures and distributes automobiles across six continents. It is currently the fourth-largest automaker in the world, based on the number of vehicles sold annually. The company's automotive brands include Ford and Lincoln. The company provides financial services, such as vehicle leases and loans, through the Ford Motor Credit Company.
SOURCES OF VALUE
F-Series Pick Up Trucks
Ford generates its maximum revenues from pick-up trucks sold in North America. The company commands a nearly 18% market share in the North American trucks segment, and this share is expected to grow steadily in the future.
Lincoln Cars
Ford's luxury cars are doing well in China, and this segment holds strong growth potential for the company.
