Ford Beats GM To The EV Punch
Ford (NYSE: F) may have been slow to the EV revolution but it has certainly hit the ground running. The company’s Lightning model, the first truly production-ready mass-market EV pickup truck, is the talk of the industry and will likely cement the company as a top-tier EV manufacturer within the first few years of production. Demand for the pickup is so strong in pre-orders the company cut them off at 200,000 and that’s a lot considering production is expected to run at 88K January 2022. Ford says it will be the #2 EV manufacturer within two years and we will not be surprised to see that happen. As for GM, GM has plenty of EV models and plans to robustly expand its line but it won’t have a fleet-ready pick-up for the market until well into 2023. That gives Ford a full year to establish itself as not only the leading ICE pickup but also the best EV pickup.
The Analysts Are Driving Ford Higher
The analyst’s activity in Ford has been of late but ultimately bullish and pushing the stock higher. The last four notes include two price target upgrades but two rating downgrades as well. The upgrades are from Wells Fargo and Barclays which both have Overweight ratings and an average price target of $24. The two downgrades include one to Underperform and one to Neutral but this is after a wicked updraft in share prices. These two see shares trading near $20.50 or fairly valued relative to current price action. The takeaway is that, while the action is mixed the trend is bullish and driving share prices higher.
The Pricetargets.com consensus price target is up 10% in the last 30 days and 20% in the last 90 days and is still lagging the price action. The consensus implies nearly 15% of downside for the stock but does not truly reflect more recent price action. The Wells Fargo/Barclay consensus of $24 implies about 15% of upside and the high target adds another $1 to the equation. It is our view the analysts will continue to upgrade the stock and the price target over the course of the next year as production for the Lightning gets underway and begins to ramp.
Insiders, Institutions Buy Ford In 2021
The insider and institutional activity in Ford shares have been net bullish in both cases. In regards to insiders, the action has been mixed but they are net buyers in the amount of $3 million worth of shares. The key takeaways from this are that sales are by large shareholders and not company executives and the most recent transaction is an $8.5 million worth of shares purchased by William Clay Ford jr. The net amount of insider ownership remains low, however, at 0.90% so no real impact to the market other than a vote of confidence in the company.
Institutional activity has also been mixed this year and with a decidedly bullish bias. While the activity speaks of rotation within the market, institutional buying has outpaced selling by $2.5 billion or about 3% of the current market cap. Institutions own about 50% of the company and their holdings are growing.
The Technical Outlook: Ford’s Long-term Outlook Is Bullish
Shares of Ford have been rocketing higher and look like they will continue to do so in the long-term. The stock is still in a consolidation nearer term but the monthly charts are very bullish. The monthly charts show a stock in a strong uptrend and breaking above a secular grade resistance point with bullish indicators. Not only are the stochastic and MACD bullish but MACD is the strongest its been in 15 years and stochastic is showing a strong signal. In our view, near-term volatility aside, this market will continue to move higher on a multiple-expansion related to its EV production.
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