In a recent conference call discussing the Q4 release, CEO Jim Farley shared Ford’s ambitious plans for hybrid sales, expecting a staggering 40% increase this year following a 20% rise last year.
The Shift in Analyst Recommendations
The sentiment among analysts regarding Ford stock has shifted, with the average recommendation now at a “Hold,” down from a “Moderate Buy” consensus three months earlier. Out of 18 analysts covering Ford, opinions vary, with five rating it as a “Strong Buy,” two as a “Moderate Buy,” eight suggesting a “Hold,” and three indicating a “Strong Sell.”
Ford’s average analyst price target of $13.70 points to a potential 3.2% upside over the next year. With Bank of America analysts raising their price target to a Street-high of $21, an impressive 58.18% rally from current levels could be in store.
The Compelling Story of Toyota Stock
Valued at a substantial $341.6 billion by market cap, Toyota Motor Corporation has a rich history dating back to its founding in 1933. The Japanese automotive giant’s dominance in hybrids, commanding a 40% market share in the U.S., is a testament to its innovative prowess.
Toyota’s stellar performance shines through with a remarkable 82.5% return over the past 52 weeks, significantly outpacing the market. Over the last decade, the stock has delivered a strong return of nearly 123%.
Moreover, Toyota’s commitment to its shareholders is evident, having paid dividends consistently for the past 37 years. With an annualized dividend of $4.00 per share, investors enjoy a respectable yield of 1.58%.
Hybrid Dominance Propelling Toyota’s Growth
Toyota’s early foray into hybrid cars in the late 1990s has paid off handsomely, as evidenced by its recent fiscal Q3 performance. The company reported impressive sales figures, with a 23% year-over-year increase in revenue to $79.50 billion and an 86.5% surge in net income to $9 billion. Notably, Q3 hybrid car sales skyrocketed by 47% annually to 951,000 units, comprising 32% of global retail sales.
Looking ahead, Toyota’s strategic focus on hybrids remains unwavering. Toyota chairman Akio Toyoda predicts a cap on all-EV demand at 30%, creating a favorable environment for increased hybrid sales. Executive Vice President Yoichi Miyazaki anticipates hybrid car sales to reach 5 million by 2025, up from 3.4 million in 2023, underlining the growing recognition of hybrids as a sustainable solution for achieving carbon neutrality.
Comparing F vs. TM: An Investor’s Dilemma
As automakers with hybrid offerings like Toyota and Ford gear up for long-term growth in the evolving market landscape, the battle for supremacy intensifies. While Ford may have a slight edge in the EV market, Toyota’s established reputation for innovation coupled with robust financial backing positions it favorably to dominate the hybrid EV space. With Toyota’s track record of reliable dividend payouts further bolstering its appeal, the Japanese automaker emerges as the more compelling investment choice in the current scenario.