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Why Most Analysts Are Suggesting a Hold on Ford’s Stock in April

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Recommendations on Ford

According to the latest data compiled by Reuters, 33% of analysts covering Ford Motor Company (F) have given the stock “buy” recommendations, while 58% have recommended a “hold.” The remaining 8% recommended a “sell.”

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Consensus target on Ford

On April 13, 2017, Ford’s consensus 12-month target price was $13.18, which reflects a positive return potential of 18.6% from its market price of $11.11. The company’s stock has been underperforming the broader market and other auto stocks for the last three quarters.

In 1Q17, Ford’s sales fell 4.4% to 617,302 from 645,626 vehicle units sold in 1Q16. The fall in sales continues to drive negative sentiments going forward.

1Q17 EPS estimates

Analysts expect the negative trend in Ford’s earnings to continue. According to analysts’ estimates, the company will post earnings per share of $0.36 in 1Q17, which is about 47% down from Ford’s EPS of $0.68 in 1Q16.

During its 4Q16 earnings release, Ford highlighted the risks and challenges it could face in fiscal 2017 due to softening US auto sales. These challenges and threats were also evident in the company’s weak 2017 outlook.

Mainstream automakers (IYK) including Ford, General Motors (GM), Fiat Chrysler (FCAU), and Toyota Motor (TM) generate a significant portion of their revenues from the US market. Thus, any downturn in US auto sales trends could negatively affect all these automakers.

Continue to the next part where we’ll look at analysts’ recommendations for Tesla (TSLA) in April 2017.

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