CFRA made changes to the financial outlook for Ford Motor Company (NYSE:) on Wednesday, raising their stock price target from $13.00 to $14.00 while maintaining a Hold rating on the stock. The move follows Ford’s announcement that first-quarter U.S. auto sales showed a 6.8% year-over-year increase with 508,083 units sold, beating expectations and outpacing average sales growth in the U.S. United by 5.5%.
The upward revision to the price target is pegged at a 2025 P/E ratio of 7.6x, reflecting a discount to historical averages. Additionally, CFRA adjusted its 2024 earnings per share (EPS) estimate for Ford to $1.85, up from $1.80, while maintaining its 2025 EPS forecast at $1.85.
Ford’s first-quarter performance was particularly strong in the hybrid vehicle segment, where sales increased 42% year over year. This surge was led by the Maverick hybrid, which saw an impressive 77% sales increase. Electric vehicle (EV) sales for Ford also showed significant growth, up 86% year-over-year to 20,223 units.
The automaker’s sales growth in the United States was even stronger when compared to its main competitor, General Motors (NYSE:), which saw volumes decline 1.5% over the same period. However, the CFRA highlighted potential hurdles for Ford and its Detroit peers, noting that upcoming comparison periods would be more challenging and that labor costs are expected to increase due to the new United Auto Workers (UAW) labor contract.
Despite the positive sales data, the CFRA warns that growing inventories could lead to sustained pressure on new vehicle prices and increased incentives. The Hold rating on Ford stock is maintained by the CFRA for valuation considerations.
Insights on InvestingPro
Following CFRA’s recent update on Ford Motor Company’s financial outlook, InvestingPro data provides further insights into the company’s current market position. With a market capitalization of $54.34 billion and a trailing twelve-month price-to-earnings (P/E) ratio adjusted for the fourth quarter of 2023 of 8.78, Ford shows signs of being attractively valued relative to industry average.
The company’s revenue growth over the trailing twelve months as of Q4 2023 stands at 11.47%, indicating solid sales performance.
InvestingPro Tips highlights that Ford pays a significant dividend to shareholders, with a current yield of 5.87%, and has maintained dividend payments for 13 consecutive years, demonstrating a commitment to returning value to investors. Furthermore, the company is recognized as a prominent player in the automotive sector and has seen a strong performance over the past three months, with a total return of 16.47%.
For readers looking to delve deeper into Ford’s financials and gain more strategic insights, InvestingPro offers several additional tips. Use the coupon code PRONEWS24 to get an additional 10% discount on a one-year or two-year Pro and Pro+ subscription and learn how this information can help you make informed investment decisions.
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