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Will Ford Stock Rise during Its 4Q16 Earnings Week?

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Jan. 23 2017, Updated 1:35 p.m. ET

Ford Motor Company

Previously in this series, we discussed how General Motors (GM) might be following Ford’s (F) strategy to impress President Trump. So far in January, Ford stock has risen 1.9%—much lower than General Motors and Fiat Chrysler’s (FCAU) gains of 6.2% and 9.8%, respectively, on Wall Street. Before we explore what to expect from Ford stock this week, let’s take a quick look at Ford’s 4Q16 estimates.

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Ford’s 4Q16 estimates

Ford is set to release its 4Q16 earnings report on January 26, 2017. According to analysts’ estimates, the company will likely post EPS of $0.33 in 4Q16. It’s less than half of Ford’s EPS of $0.58 in the same quarter in 2015. Similarly, analysts expect Ford’s fiscal 2016 EPS to remain 6.7% lower at $1.80—compared to $1.93 in fiscal 2015.

The company’s falling margins along with its dismal fiscal 2016 guidance could be two key reasons behind the lower expectations.

Read Ford’s 4Q16 Earnings Estimates: Is There Any Hope? to learn more.

According to a report from Reuters, Ford announced its intentions to halt the production of its F-Series trucks at the Kansas City plant for a week in January 2017. It will likely level out the demand and supply equation because its inventory increased lately.

Note that Ford’s F-Series trucks have been ruling the US auto market for over three decades. In the pickup truck segment (IYK), Ford competes with General Motors, Fiat Chrysler, and Toyota (TM).

Key support and resistance

Currently, Ford stock is trading at $12.36 and approaching an immediate horizontal support near $11.90. When the price stays above the support level, we can expect the stock to trade on a bullish note during its earnings week. However, a breach below the support level could extend the fall towards the next major support near 11.20. On the upside, an immediate resistance lies near $12.70.

In the next part, we’ll look at Fiat Chrysler’s movement last week and its key support and resistance levels for the week ahead.

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