Why Ford Stock Is Falling despite Positive August Sales Data

Jitendra Parashar - Author

Aug. 18 2020, Updated 5:30 a.m. ET

Ford stock falls

In the week that ended on September 7, Ford Motor Company (F) stock settled at $9.27, a 2.2% weekly fall. The stock has witnessed negative movements in eight out of the last ten weeks.

In the week before last, Ford fell 2.1%. As of September, the stock has seen 24.9% value erosion in 2018 so far. In comparison (XLY), General Motors (GM), Tesla (TSLA), and Fiat Chrysler Automobiles (FCAU) have fallen 17.3%, 15.5%, and 7.2% year-to-date, respectively.

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Recent fundamentals

Last week, Ford revealed that its August US sales had recovered 4.1% YoY (year-over-year) after witnessing a fall of 3.1% YoY in July. While the company’s US fleet sales jumped 15.0% in August, its US retail sales inched up 1.1%. However, Japanese automaker Toyota’s August US sales volume of 223,055 units was higher than Ford’s 218,504 units, marking the second consecutive month during which Toyota reported higher US sales than Ford.

Despite Ford’s recovery in August US sales, its falling market share and dismal growth in retail sales could be two main reasons why its stock traded on a negative note last week. Concerns about the ongoing global trade war could also be hurting auto stocks including Ford.

During its second-quarter earnings event, Ford revised its 2018 earnings guidance downward. Now it expects its 2018 adjusted EPS to be $1.30–$1.50, lower than its original guidance of $1.45–$1.70.

Technical outlook

Last week, Ford stock continued to form a sequence of lower lows and lower highs. An immediate support level lies near $9.10 followed by a key support level near $8.40. A violation of these two supports could attract renewed selling pressure in the stock. On the upside, a stiff resistance level stands at $10.30.

Read on to the next article, where we’ll see how GM stock traded last week.


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