Important points
Analysts at JPMorgan and Bank of America lowered their price targets for Ford following the company’s third-quarter results. JPMorgan said the company missed Wall Street’s profit expectations, due in part to “continued high warranty costs.” The reason lies in the company’s Ford Pro commercial division. BofA said it is optimistic about the long term.
Ford (F) stock fell on Tuesday as analysts at JPMorgan and Bank of America lowered their price targets following the company’s underwhelming third-quarter results.
Ford stock fell more than 8% on Tuesday morning. The company reported on Monday that its third-quarter profit was lower than analysts expected, and it revised its full-year outlook downward to expect full-year adjusted profit of about $10 billion, down from previous expectations of $10 billion to $12 billion. did.
JPMorgan analysts lowered their price target from $15 to $14, citing the company’s “continued high warranty costs” giving them an Overweight rating.
Bank of America lowered its price target from $20 to $19, citing lower-than-expected earnings from Ford Blue, the company’s gasoline passenger vehicle and hybrid unit, but maintained a buy call.
BofA points out reasons for optimism in Ford’s professional division
BofA cited a “positive image” of Ford’s recent business operations and said the automaker’s management cited strength in its core truck market, particularly its professional segment serving commercial customers. pointed out.
Ford Pro division’s third-quarter sales rose 13% year over year, beating Wall Street expectations. Meanwhile, Ford Pro Intelligence paid software subscriptions increased 30%.
BofA said it maintained a buy call citing “Ford’s strong near-term product rhythm and management focus.”
“We expect improved earnings and progress in 2025 and beyond,” BofA said.
Meanwhile, JPMorgan said it maintains an overweight rating on Ford, citing the “deep value” the stock offers. The broker said that while Tesla (TSLA) is one of the few highly profitable battery electric vehicle (EV) makers, its free cash flow generation levels this year are expected to be much lower than Ford’s. pointed out.
Ford shares fell 8% on Tuesday.
