Ford & ADT Form Canopy Joint Venture to Launch Vehicle-Security Monitoring

Automaker Ford Motor Company (NYSE: F) was again in the headlines on Tuesday after it reached a market capitalization of over $100 billion for the first time in its history last week. 

Now, Ford, which is one of the top-rated EV stocks on TipRanks, is again in the limelight, after it announced the creation of a new joint venture named Canopy with ADT Inc. (NYSE: ADT). ADT is a provider of security systems.

Through Canopy, the companies plan to provide AI-powered connected security cameras, along with a mobile app, for a variety of vehicles. It will do so by combining ADT’s professional security monitoring and Ford’s AI-driven video camera technology. This will strengthen the security of new and existing vehicles for customers across automotive brands. 

Ford Motor is a global automobile company and is the third-largest car manufacturer in the United States. The company is engaged in designing, manufacturing, and selling cars, trucks, and automobile parts. Investors seem to be bullish about the company, thanks to its growth plans and CEO Jim Farley’s aggressive electrification strategy. Shares of the company have seen an uptrend over the past year, recording gains of 125.74%. 

Joint Venture in Detail 

This first-of-its-kind in the industry of multi-sensor security systems is likely to be launched by Canopy early next year in the U.S. and the U.K. These easily installable systems will protect both the vehicles and the vehicle owners’ expensive work and recreational equipment that they keep in the cars. The first vehicles to benefit will be commercial and retail pickups and vans, including the Ford F-150, F-150 Lightning, Transit vans, and E-Transit.  

These systems will be sold at Ford dealers and other retail and online outlets, and the monitoring services will be charged by ADT. 

VP of Ford New Business Platform at Ford, Franck Louis-Victor, said, “Key to Ford’s software-led transformation are new ideas such as Canopy and collaborating with other innovators such as ADT, which brings to vehicle security their leadership protecting families, homes, and businesses.” 

Ford and ADT’s initial investment in Canopy is expected to close in the second quarter of 2022, pending regulatory approvals. Around an investment of $100 million is expected during the next three years by both companies. 

Other Developments 

According to a recent Ford press release, the company is expected to report certain special items in its upcoming earnings report of the fourth-quarter and full-year 2021 results, to be released on February 3, after the market closes.  

Among other positive factors, a gain of $8.2 billion on its investment in EV start-up Rivian Automotive Inc. (RIVN) is expected to be reflected in the results of the fourth quarter of 2021. Additionally, a non-cash gain of around $900 million on the Rivian investment will be reclassified from the first quarter of 2021 as a special item. 

Notably, Ford invested $1.2 billion in Rivian since early 2019 and holds a 12% stake in the company. 

Wall Street’s Take 

Recently, Deutsche Bank analyst Emmanuel Rosner maintained a Hold rating on Ford but raised the price target to $24 (1.56% downside potential) from $18. 

Rosner said, “We see room for Ford’s fourth quarter performance to come in above consensus expectations, based on continued strong pricing offsetting growing raw materials headwinds.” 

The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 10 Buys, 6 Holds, and 3 Sells. The average Ford price target of $22.50 implies 7.71% downside potential. 

Website Traffic 

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Ford’s performance this quarter.  

According to the tool, the Ford website recorded a 1.62% increase in global visits in December compared to the same period last year. Also, year-to-date website growth, compared to year-to-date website growth in the previous year, came in at 10.7%. 

Additionally, a website traffic uptrend on the website traffic tool is visible. In 4Q21, there was a substantial increase in traffic to the overall Ford website from unique visitors, on a global basis. This, in turn, indicates the company might have recorded strong revenues in the to-be-reported quarter.

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