Stalwart automaker Ford, a veritable road warrior, has navigated the ebbs and flows of the market over decades. Investors have long been drawn to Ford’s resilience – if it has withstood the test of time, it is assumed to continue its journey. Yet, a recent downgrade by Morgan Stanley has sent shockwaves through Ford, causing a nearly 4% tumble in Wednesday afternoon trading.
Morgan Stanley’s Adam Jonas not only slashed Ford’s rating from Overweight to Equal Weight but also clipped the price target on shares from $16 to $12. The crux of the issue lies in China, where Ford manufactures its Territory compact SUV. China currently churns out nine million more cars than it consumes, hinting at a potential export boom. However, this surplus spells trouble for U.S. markets, heralding a potential loss of market share and profitability amidst increasing regulations in the electric vehicle sector, as noted by Jonas.
Promising Developments Amidst the Storm
However, Ford isn’t hitting the brakes just yet. Recent sightings of the 2024 Mustang Dark Horse on AutoBlog reveal an impressive vehicle that is set to rev up interest in the market, despite economic constraints that may deter purchases for now.
Moreover, Ford has kickstarted production of the electric Capri in Cologne, Germany. This marks the second electric car that Ford is manufacturing in Germany, indicating a strategic move to secure wins swiftly. The Capri, akin to the Explorer, boasts the same technical underpinnings but flaunts a sleeker roofline. Initially offering only large battery models, reports suggest that the Capri will introduce smaller battery models by year-end.
Is Ford Stock a Diamond in the Rough?
Delving into Wall Street sentiments, analysts maintain a Moderate Buy consensus on Ford stock, supported by five Buy, nine Hold, and one Sell ratings over the past three months. Despite a 10.14% dip in share price over the past year, the average price target of $13.67 per share implies a promising 30.75% upside potential, as depicted in the graphic below.
Uncover more insights on Ford’s analyst ratings