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Analysts’ Target Price on Ford Stock Has Continued to Fall in Q1

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Analysts on Ford stock

According to the data compiled by Reuters on March 28, only ~23% of the analysts covering Ford Motor Company (F) stock have given it “buy” recommendations. A 68% majority remain uncertain and have recommended “holds” on the stock, while the remaining 9% have suggested “sells.”

The above-mentioned stock recommendations are based on the consensus of total 22 Wall Street analysts covering Ford in March.

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No major upside potential

On March 28, analysts’ consensus 12-month target price for Ford was $9.51. This target price reflected a potential upside of ~8.4% from its market price of $8.77. In the last five months, the consensus target price for Ford has fallen to $9.51 from near $10.59. About seven months ago, analysts’ target price for Ford was much higher at $12.45.

Ford stock remained negative in all four quarters of 2018. The stock fell ~10.3%, 0.1%, 16.4%, and 17.3%, respectively, in the first, second, third, and fourth quarters last year. In contrast, in the first quarter of 2019 so far, the stock has seen a solid recovery of 14.6%.

Recent fundamentals

On March 27, Ford announced a restructuring plan for the Russian market. In Russia, Ford operates through a joint venture with its partner Sollers PJSC. Under the new restructuring plan, the company will stop producing passenger cars in Russia and focus only on the commercial vehicle business.

On February 21, Ford was revealed to have hired an outside company to investigate “the vehicle road load specifications used in our testing and applications to certify emissions and fuel economy.” In its press release, Ford said that the investigations “do not involve the use of defeat devices” in its cars. Defeat devices are illegal and capable of significantly reducing a vehicle’s emissions (XLY) (IYK) during emission tests by authorities. In the last six months, Ford’s 12-month forward PE ratio has fallen to 7.1x from its earlier level of 8.1x.

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