Nearly two dozen analysts offering 12-month price forecasts on Ford Motor Co (NYSE:F) stock have arrived at a median price target of $14.50. This price target is in the lower third of the range estimate of $10 on the low and $28 on the high side. It is also in the bottom quarter of the 52-week range, which is only slightly smaller than the new estimate.
Although Ford Motor Co stock has not been performing too favorably of late, the majority of these analysts have given the stock a HOLD rating.
Wavering—but Steady—Decline This Year
Ford Motor Company stock has been in pretty steady decline since the top of the year, peaking at $25.19, which is just below the top of the range estimate. Unfortunately, while the stock has seen a lot of up-and-down movement, value always corrected downward, to finally bottom out a few months ago—in July—at around $11. Since then, Ford Motor Corp investors have probably been quite happy to see share value climb quickly back up to another peak of $16.43 in the middle of August.
It may now be true that share value has not managed to remain at this level, but it has held somewhat steady; that is, until the 9/20 announcement that saw the stock plummet. In this announcement, Ford said the month of September will end with between 40,000 and 45,000 large pickups unfinished because of a parts shortage.
Compounding Financial Issues Lead to Quick Drop
This dramatic slide came after the recent inflation warning that will certainly exacerbate some of the car company's financial concerns for at least the next few months. In addition, supply negotiations are, not exactly going their way; and this rise in prices will cost Ford Motor Co at least another $1 billion for the quarter.
At the same time, Ford believes that despite the loss of what would have been expensive vehicles, they should still manage to reach their full-year guidance. They plan to do this by shifting sales revenue from new vehicles that are near completion, into Q4.
Despite the reassurance, the news pushed the stock down 5 percent in premarket trading the follow day. By close of day on Tuesday, September 21, 2022 the stock was down 12.3 percent, at $13.09. This shed approximately $7 billion in Ford's market value. It was the stock's biggest single-day drop since 2011.
Quarterly Earnings Demonstrate A Wavering Business
Ford Motor Co stock's current Earnings Per share (EPS) is just $0.47 on $38.7B in sales. This appears to follow the carmaker's trend for the last year (or more). For example, in Q3 of 2021, reported earnings beat nearly doubled the consensus estimate to beat the range by 25 percent, closing at $0.51 (with the range peak at $0.42). Unfortunately, earnings for the next quarter (Q4 2021) failed to meet the range at all (at $0.26, against the low estimate of $0.36).
Things seemed to be improving in the beginning of this year, with the reported earnings beating the $0.37 consensus estimate by just a penny. This trend persisted in Q2 of this year, with the reported earnings besting the range again, coming in a dime over the top at $0.68. It is likely that investors had hoped this climb would continue; until the news this week.
Annual Earnings Look A Little Better, In Some Ways
On annual basis, it may be easier to identify why analysts still have some faith in Ford Motor Co stock. The numbers suggest that the company had been doing well, consistently, particularly during the pandemic. Of course, analysts lowered their expectations that year, apparently thinking the company could hold steady. Instead, they beat the estimate by a wide margin.
In 2018 analysts forecast an earnings range of $1.3 to $1.46 with a consensus estimate of $1.32. Reported earnings settled just shy of the mark, at a still admirable $1.30. The next year, though, the reported earnings of $1.19 did not beat the estimate ($1.23), but was comfortably within the range.
With earnings trending down, analysts forecast a downturn for the company with a range that reached into the negative (-$0.07 to $0.11) and a consensus earnings estimate of zero. While they may have hoped the actual earnings would be better, they may not have anticipated how much better: In 2020, Ford reported annual earnings per share of $0.41.
The major shift came in 2021. After an impressive year, the pandemic may have struck down some of Ford's momentum, as the reported earnings of $1.59 did not beat the estimate. In fact, it came in nearly ten cents below the range. This could be the reason analysts haven't lost faith in Ford: the past few years have been steady, if not excellent, but the recent slip could be anomalous from pandemic complications (coupled with inflation concerns).
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